YOKOHAMA, Japan — Nissan CEO Hiroto Saikawa has a plan to reverse the sudden U.S. free fall that has driven the automaker to its worst financial funk in more than a decade — but it's not going to happen quickly.
"People will question why we are not delivering results soon," Saikawa predicted last week while announcing a 45 percent plunge in Nissan's global operating profit for the fiscal year ended March 31. It was the company's lowest in 11 years.
"But we need to be patient here."
That's especially true in the U.S., he emphasized. Saikawa conceded the U.S. recovery will take at least another four years.
And even then, Nissan's U.S. business won't reach the same volume or profit margins it enjoyed as recently as 2017, when Carlos Ghosn stepped down as CEO. In the fiscal year ended that March, Nissan's sales soared to 1.58 million vehicles in the U.S.
In Saikawa's own words, Nissan performance is hitting "rock bottom."
His road map to recovery involves a rush of new products, a rollout of electrified and autonomous driving technologies, job cuts and a clampdown on fleet sales and incentive spending.
Saikawa, who has presided over a post-Ghosn era in which Nissan's U.S. profit engine stalled, now projects U.S. sales of 1.4 million vehicles in the fiscal year ending March 31, 2023.
The U.S. operating profit margin, now languishing at 1 to 2 percent, should climb by around 5 percentage points by then, the CEO said. But that still won't match Ghosn-era highs.
And things will only get worse before they get better.
"We would like to hit rock bottom in 2018 and 2019 and reverse the trend in the following years," Saikawa said. "It will take time to recuperate, and we are ready to spend time."
Nissan forecasts that operating profit will plunge again in the current fiscal year, dropping another 28 percent. Net income, the company predicted, will plummet 47 percent.
Operating profit margin will decline to 2 percent, from 2.7 percent in the just-ended fiscal year.
Saikawa said he wants to restore the parent company's operating profit margin to 6 percent in the fiscal year ending March 31, 2023.