Nissan stock performs worst in five decades under current CEO
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Nissan’s stock has fallen 47 per cent since Mr Uchida became CEO on Dec 1, 2019.
PHOTO: REUTERS
Mr Makoto Uchida’s five-year anniversary as president and chief executive of Nissan Motor is little cause for celebration among shareholders.
The carmaker’s stock has performed worse during his time at the helm than under any other leader in at least five decades, data compiled by Bloomberg shows.
Shares have also lagged those of the company’s global peers.
Nissan’s stock has fallen 47 per cent since Mr Uchida became CEO
By this measure, he is the company’s worst-performing president since at least 1974, from when Bloomberg data is available.
Mr Uchida has had to steer the company through huge challenges in the past five years.
When he took charge, Nissan was still reeling from the arrest and escape from Japan of former chairman Carlos Ghosn
Nissan shares have lagged the MSCI World Automobiles Index by more than 170 points under Mr Uchida – the worst relative performance by any CEO since the global benchmark launched in 1999.
In Mr Uchida’s time as CEO, Nissan’s sales have shrunk, its profits have plunged and its price-to-book ratio has declined to the lowest among Japan’s top-500 listed companies.
The carmaker’s bad fortunes have now made it a target of activist investors, with a fund linked to Effissimo Capital Management found to have taken a stake in November.
In another blow, Nissan’s chief financial officer Stephen Ma is said to be stepping down, leaving Mr Uchida as the company’s only top-level C-suite executive, after chief operating officer Ashwani Gupta left in 2023.
A representative for Nissan declined to comment on the company’s share performance.
“Management has made a lot of mistakes,” said Ms Julie Boote, a senior analyst at Pelham Smithers Associates.
An outdated product line-up, lack of attractive hybrid offerings in the US and slow development of new models are at the core of the maker’s struggles, she said.
Last week, both Moody’s Ratings and Fitch Ratings downgraded Nissan’s outlook to negative on the company’s murky prospects in the US.
Nomura Securities also cut its stock rating to neutral from buy on the view that stabilising earnings will take time.
To address plummeting income, Mr Uchida unveiled a plan to slash costs, including cuts to jobs, production capacity and earnings outlook in November.
The measures resemble “a copy-and-paste job from the ‘Nissan NEXT’ plan in 2020”, which involved similar cost-cutting methods, said Ms Boote.
Ghosn’s legacy
The tenures of Mr Uchida and his predecessor Hiroto Saikawa, under whom shares declined 37 per cent, stand in stark contrast to the climb Nissan enjoyed under forebear Mr Ghosn.
The stock rose 98 per cent during his 17 years at the wheel, outpacing the Topix by 99 points.
Shares beat the MSCI global auto index by 52 points in that period.
“Ghosn was very focused on increasing market share and sales, but that came at the expense of quality and margins,” said Ms Boote. “It’s fair to say that Ghosn’s legacy is still hurting the current management.”
Hot competition from Chinese carmakers and rising pressure on Japanese manufacturers to accelerate electric vehicle production mean that Mr Uchida and Mr Saikawa have also faced market challenges that predecessors did not.
Yet even compared with domestic peers, Nissan has lagged.
Its shares have underperformed Mazda Motor, Honda Motor and Toyota Motor by at least 25 points since Mr Saikawa took charge in April 2017, according to data compiled by Bloomberg.
Mr Uchida’s job is only likely to get harder in 2025, amid activist shareholder pressure and higher US tariffs from the incoming Donald Trump administration, Ms Boote said.
“If activists are really interested in turning around the business, the first step would be a management overhaul,” she said. BLOOMBERG
