In 1999, a French-Brazilian-Lebanese businessman saved a large Japanese automaker from certain bankruptcy. Since then, Carlos Ghosn, cost cutter extraordinaire, wears the dual crowns of the presidency of Renault and Nissan. The Japanese crown is turning into a very heavy burden. According to Tokyo’s Nikkei (sub), Carlos Ghosn, “is facing an even more daunting challenge of securing profits amid the yen’s rise and the deep economic downturn. Ghosn acknowledges that the external environment facing Nissan is far more bleak than in 1999, when Nissan was trying to rise above damages that were largely self-inflicted.” Fixer Ghosn is softening the blow for the announcement that he can mend self-inflicted wounds. But he isn’t godlike – yet – to save Nissan from external damnation. Nissan appears to be in deep, deep kuso. Ghosn is fighting two armies of windmills:
A worldwide plunge in sales caused by the financial crisis, and the yen’s advance against other currencies. Ghosn has no other choices than to improve short-term earnings by mortgaging Nissan’s future: Plans for new factories are being scrapped; budgets for development projects are being cut. Two sacred cows are being turned into Kobe beef.
Sacred cow three: Nissan is set to move production of its March subcompact to a factory in Thailand. Japanese automakers moved production overseas when the yen was strong in the 1990s, but this mainly covered vehicles for export. Domestic production was maintained to keep jobs and technologies in Japan. Says the Nikkei: “But with domestic sales declining, it has become difficult for Nissan to develop vehicles exclusively for the domestic market. The decision to turn the March subcompact into a global vehicle and to produce it in Thailand marks an end to the automaker’s long-standing practice of making cars for the domestic market at home.”
When the March is due for a full remodeling in 2010, Nissan will stop production in Japan and import all units for the domestic market from Thailand.
According to the Nikkei, “the redesigned March, to be sold in Japan and emerging markets in Asia, will use a chassis developed with French partner Renault SA. Production costs for the car will be cut by about 30 percent by procuring more parts locally — about 90% — in addition to using a common chassis.”
A whole slaughterhouse of sacred cows is likely to follow. It’s either that, or certain bankruptcy again.
I don’t know how many sales the CVT has cost Nissan but IMO it is significant.
Another example of this thinking is when some makers offer a model only with runflat tires and then wondering why otherwise interested buyers walk away.
I personally would not purchase a car where a transmission failure at year five to seven will cost me more ($6,000 USD)than the current value of the car(Murano, Altima, Maxima, Rogue)or a car where I need to spend $1200-1600 to replace the tires (RAV4, some BMW).
At least in the US, Nissan seems relegated to second tier status behind Toyota and Honda. Mazda sits somewhere behind Nissan … and Mitsubishi is nearly off the radar screen. In Europe Nissan has the special problem of competing with partner Renault for many of the same customers.
Toyota has something for almost everyone; predicated on manufacturing excellent and shear size. Honda takes rifle shots at market segments and hits more than it misses. In many ways, Honda is there to keep Toyota honest. But what role does Nissan play?
Ghosn’s one man running two quasi-independent companies gig has more than worn out its welcome. These challenging times demand focused, coherent leadership. It is impossible for Ghosn to provide that to both Nissan and Renault. Iaccoca once saved Chrysler, and then needed to be pushed aside later on for the company to make further progress. Ghosn’s relationship with Nissan is in a similar situation today.
“I don’t know how many sales the CVT has cost Nissan but IMO it is significant.”
CVTs in all but the smallest, lightest vehicles have been a disaster. GM/Fiat, Ford/ZF and Nissan’s CVTs have all been underwhelming efforts which have caused far more problems than they have solved.
The funny thing is, Nissan actually gained in Europe in 08 despite the overall bloodletting …
The Japanese are pretty nationalistic. Who thinks they will have a problem selling a foriegn built Nissan in Japan?
@Volvo & John Horner
I’d wager none. Nissan’s CVT has gotten pretty solid reviews from all but staunch traditionalists. In instances such as the 2009 Maxima, it’s superior to most DSG (Volkswagen) setups I’ve used on similar cars.
Nissan is the only product-focused manufacturer left of the Japanese big three. Honda has decided to focus more energy on ‘greenwashing’ , and so has Toyota. Meanwhile the quality of their cars is bottoming out whereas Nissan’s is improving (and surpassed Toyota and Honda circa 2007.)
“In instances such as the 2009 Maxima, it’s superior to most DSG (Volkswagen) setups I’ve used on similar cars.”
CVT is superior to VW’s DSG? How are they even close to being the same? I think you’re confused as to how these are used
i agree on the CVT thing costing sales. the current Maxima/Teana sold here originally came with a 4 speed auto and the facelift replaced the auto with a CVT. i’d only buy the prefacelift version.
no way i’d buy a CVT transmission equipped car. also a friend is a service manger for a nissan dealer and the CVT needs to be serviced exactly the right time with exactly the right Nissan fluid or BOOM.
I hope the redesigned March is not such a girls car as the current model. it’s a proper small car with 1.2 and 1.4l engines here, but the styling…
http://www.autoincar.com/wp-content/uploads/2008/02/nissan-march-current.jpg
Is Kuso like Kimchi?
Kuso means excrement.
I still think Ghosn will do a good job. Times are tough, all right. But Nissan should pull through. It is much better managed than the Detroit Big Three. And its financial position is better.
John Horner:
Add Chrysler to that list. You can get CVT’s in the Caliber/Compass/Patriot trio, and most people complain about them.
The crazy thing with CVTs is that they don’t result in the fuel economy improvement one hopes for, at least not in larger vehicles. Advanced engine management, particularly variable valve schemes, have greatly broadened the efficient operating range of an engine. Meanwhile, the CVT control mechanisms require the constant use of some power to manage the variable sheaves of the pulley halves. A modern autobox with a lock up torque converter has very low losses at steady state conditions.
One of the few apples-to-apples comparisons available was the original Ford Five Hundred family which could be bought with either style of transmission. The Ford sourced conventional automatic transmission returned better fuel economy than the ZF sourced CVT. Ford has since dropped the CVT option.
Hybrid power-trains are a different situation, but for advanced engines in conventional power-trains there is little to recommend the CVT.
To Nissan’s credit, they use a Toroidal CVT which operates quite differently from the two variable-pulley type of nearly all other designs. Perhaps Nissan’s version works better than the others. A nice little graphic of their system is here: http://auto.howstuffworks.com/cvt3.htm
Nissan’s issue have practically nothing to do with what transmission they’ve been using or not (trust me 90% of the market couldn’t tell a CVT from an auto). The issue that hurts them now is that they don’t have near the presence in the “ordinary car” areas of the market that Toyota and Honda have.
Ghosn made the cuts that got Nissan back in the black, and got them to understand they couldn’t go mano e mano with Toyota in Japan anymore. The problem is that they haven’t found a plan to replace it.
I find it amusing that so many people who have never owned or driven a Nissan CVT car for any period of time have such negative views. They consistently claim failures yet have no references or statistics (also known as hard data) other than their own opinions or hearsay from their “friend” the service guy. Clearly Nissan faces a crisis as do all the other makers but no worse than some others ;) and it won’t be just because of the CVT..
I would wager most people other than car geeks would even know they are driving a CVT.
And there is no empirical evidence that they fail more than any other type – perhaps even less.
By the way, if you own a Honda Odyssey you will certainly understand the concept of transmission failure.
I also won’t buy CVT. When Subaru introduced them I thought they were logical and cutting edge. CVT, 4 wheel drive sounded good. CVT failed and replacement quote was 1/2 value of vehicle.
Unlike other professions, mechanics have no governing body. Charge like the medical profession but have no standards. I’d previously paid $3000 for a transmission job that failed and was told, “It’s baffed – laugh” No recourse, sold to wrecker for $300. It’s embarrasing to say.
$100/hr shop fee and no ethics. Given both these personal data hard facts. I recommend never to consider a CVT.
Mikeolan, ”Nissan is the only product-focused manufacturer left of the Japanese big three. Honda has decided to focus more energy on ‘greenwashing’ , and so has Toyota.”
Don’t fall for the trap that if a company doesn’t build to your tastes that it is not product focused. The Corolla, Civic , Camry and Accord are product focused to the vast middle of the market. Nissan has gone more toward the aggressive and sport oriented market.
Brent Woods:
Ive been campaigning against and warning my clients about, CVTs ever since my transmission supplier got back from a seminar and told me how much they were going to cost to repair.
We’re at $79 an hour and like many other independents, our motto is “honesty, integrity and technical excellence”. We’re out there, you just have to find us.
With so many iteartions on automatic gearboxes, the ‘old fashioned’ torque converters are by far the best. I was looking for a small automatic car. The DSG’s work well most of the time though reliability is an issue. I tried a A class MB (CVT) and they just ruined a fine vehicle. It looks that the wheels are connected by elastic band to the engine. Conventional robotized boxes are either smooth and sloooow or fast and abrupt. I actually found the CVT Civic Hybrid to be very good. So I went for a torque converter. Have fun.
The abysmal reliability record of their trucks can’t be helping. The Titan, and the SUVs based on it, are infamous which is why there is so much buzz about them buying the Ram when Chrysler goes belly up.
The March looks like an attractive little car. More so than the Versa.
Rumor has it that the Japanese carmakers will get to split $11 billion in government loans. That may help.
Maybe Michael Karesh could report on the CVT thing, since he is in a good postion to do so.
Similar to what I said on the European euthanizing thread, you really think the Jap gov is going to let anybody go down? Seriously?
On C. Ghosn, his time’s up. You cant cost cut your way to prosperity eternally. He did a fine job the first moment, but he’s long outlived his welcome or use. His “magical” wielding of the cost-cutting scissors by now is causing Nissan more damage than good. Good riddance Mr Ghosn! Go enjoy your multi-million retirement somewhere. Please.
With CVTs reliability isn’t the issue for me.
Repairability is the issue. At the current time my understanding is that Nissan CVTs either cannot be repaired in the field or Nissan will not repair them in the field. That means you get a reman or new transmission when yours fails. I believe the current price for R/R when out of warranty is in the range of $5,000 – $6,000.
The last time I had a standard auto transmission rebuilt (2006)the cost for parts and labor was $1600.