Famed automotive executive Carlos Ghosn has been in the news of late for his audacious escape from custody in Japan, where he was arrested more than a year ago on charges of financial wrongdoing. But in this article, The New York Times focuses on the more mundane question of how he left his most recent automotive job, as head of Nissan.

Ghosn, not surprisingly, says he left the automaker in good shape. But industry experts and U.S. dealers, including Bernie Moreno in Cleveland, says his strategy was at least partly to blame for Nissan’s current troubles.

From the piece:

Less than three years after Mr. Ghosn gave up the top job at Nissan, it has slipped into a deep slump. Revenue and profits are falling in markets around the world. Sales in the United States — its most crucial market after China — fell 10% in 2019, a staggering decline at a time when auto sales are at near-record levels.

Analysts and industry executives lay much of the blame for Nissan’s woes on Mr. Ghosn. Over his last eight years at the helm, he led an unrelenting push for growth, often at the expense of the bottom line. To satisfy his demands for higher sales and more market share, Nissan executives turned to questionable practices that alienated a critical constituency: the dealers who sell its cars.

“Almost nobody calls now and says, ‘I want to buy a Nissan franchise,’ ” said Alan Haig, president of Haig Partners, which advises buyers and sellers of auto dealerships. “Carlos pushed too hard. He had very ambitious goals, and he pushed his managers to achieve them. He created a temporary situation that looked good for a while, but it was artificial.”

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The Times notes that Ghosn drove hard for Nissan to have a 10% share of the market. In turn, “Nissan’s United States executives increasingly took aim at smaller dealers, imposing ever more demanding terms to ramp up sales,” The Times says.

The company “also began favoring a few large dealers, quietly agreeing to provide funding to them that was not offered to others nearby,” The Times says. But that didn’t go so well, either.

Here’s the Moreno portion of the article:

In Coral Gables, Fla., Bernie Moreno had a confidential agreement calling for Nissan to pay him $4.4 million over several years to fund an opulent Infiniti dealership, he said. Nissan also agreed to give him $6.5 million more for two new Nissan dealerships he opened near Cleveland.

Even with extra money from Nissan, Mr. Moreno eventually struggled. One month in 2018, Nissan raised the sales goal of his Infiniti store to 180 cars — about twice as many as it would naturally sell.

“It was an impossible number,” he said. The type of stair-step programs Nissan operated “were like heroin,” Mr. Moreno added. “They gave car companies an immediate boost in sales, but then they couldn’t get off it.”
Moreno earlier this week tweeted this in response to The Times’ article: “The retail automotive business can thrive for among time … IF car companies allow their dealers to succeed by empowering them to sell and service cars without ridiculous and complicated programs.”



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