Nissan's sales in Europe fell by over a quarter in the first nine months as the company suffered headwinds ranging from an aging model lineup, difficulties adapting to WTLP regulations and management turmoil related to the departure of its scandal-hit leaders Carlos Ghosn and Hiroto Saikawa. The sales decline has happened under the watch of Nissan Europe Chairman Gianluca de Ficchy, who was appointed to the role in April 2018. But, as he told Automotive News Europe Correspondent Nick Gibbs, the drop is a calculated move to cut unprofitable channels and get leaner ahead of a big push into electrification.
Why have your vehicle sales fallen so sharply and what are you doing to stop the decline?
We have been undergoing a significant transition for the last one-and-a-half to two years. First, there have been many changes in the market with the new [WLTP emissions] regulations coming in. At the same time, we really wanted to focus on the most profitable channels and try to create a healthier business and a really good brand position for the future. Most automakers have been continuously pushing into channels such as rentals or fleets. Since 2017, Nissan Europe's self-registrations have decreased by about 100,000 units. I think the value of the brand is something we have to preserve for the future.
Despite the move to more profitable sales channels Nissan Europe still lost money in the first half. Why?
Yes, we are losing money, and we probably would not lose as much money if we weren't doing what we are doing. During a transition phase you reduce your volumes, resulting in a lack of synchronization between your revenue stream and your costs. We expected this.
How are you reducing costs?
We are working to optimize the structure to fit the volume levels we will have in the future, not the current levels. We are doing this because we have an aging lineup.
What is your time frame to renew your product range?
The lineup will be completely renewed in the next year and a half. We are launching the new Juke now, then we will add the new Qashqai and X-Trail. Plus, the new electric crossover, previewed by the Ariya concept.
How will the new models help your price structure?
The combination of our aging lineup and our move into more profitable channels meant we could not just focus on volume because it would create a significant discrepancy in the price position of the vehicles. We wanted to avoid this. All the new vehicles will have a reasonable price.
What are the restructuring actions?
To try to be as lean as possible, we have restructured the Barcelona plant, affecting about 600 to 700 people, due to the reduced volumes. This process, which is underway now and was approved by the unions, includes voluntary redundancy schemes. We also cut the third shift at our Sunderland plant in the UK due to the contractions in volumes.
Were there job losses at Sunderland?
Only about 100 to 200 people.
This summer Nissan talked about worldwide job cuts of around 12,000 and a 10 percent reduction in capacity utilization. Are those 700 to 900 jobs the extent of the European losses?
We do not expect additional reductions.
What is the future for Barcelona? Does it need another model now?
The strategy is to continue production of pickups [the Nissan Navara, Renault Alaskan and Mercedes X class are made there] and the e-NV200 electric van. We stopped production of the NV200 with the conventional engine but estimate the number of e-NV200s will rise significantly. Of course, as for any other plants, we are discussing locations for new vehicles.
One report said you were looking to sell your European plants. Is that true?
We do not normally comment on speculation. We plan to continue producing the e-NV200 and the pickups in Barcelona. I do not see an opportunity to sell the plant at the moment.