Nissan, Carlos Ghosn Charged With Underreporting His Compensation

In addition to indictment, prosecutors lay out new suspicions that Ghosn underreported his income for three years ended March 2018

Dec. 10, 2018

TOKYO—Nissan Motor Co.’s Carlos Ghosn was formally charged with understating his compensation in Nissan’s financial reports, and prosecutors took steps to ensure he would spend Christmas in jail.

Bringing their first charges against Mr. Ghosn, Tokyo prosecutors alleged he conspired to report only about half of his compensation during the five years ended March 2015. They said his true compensation added up to the equivalent of about $87 million over the period, but the company’s financial reports said it was $44 million.

The charges close off any chance Mr. Ghosn could put an early end to his troubles and depart the country that once feted him for his achievement in turning around Nissan. Instead, barring a confession, he is poised for a legal struggle that could last years and keep him behind bars well into 2019.

Nissan was indicted alongside Mr. Ghosn. In a written statement, Nissan apologized for what it called “false disclosures” and said it would improve its governance. A Nissan representative declined to say whether the company would contest the allegations.

Greg Kelly, Mr. Ghosn’s right-hand man at Nissan and a former representative director there, was indicted on charges of conspiring with Mr. Ghosn to understate his compensation.

Neither Mr. Ghosn nor his lawyer, Motonari Otsuru, have spoken publicly about the case. Japanese public broadcaster NHK reported that Mr. Ghosn denies wrongdoing, and the lawyer’s office declined to comment.

People familiar with the matter have said the unreported money cited by prosecutors reflected deferred compensation that Mr. Ghosn was due upon retirement.

Mr. Kelly’s lawyer, Yoichi Kitamura, has said Mr. Kelly believed the future payments weren’t fixed amounts and concluded after seeking advice from outside experts that the money didn’t need to be mentioned in Nissan’s annual financial reports. In a brief interview on Monday, Mr. Kitamura said of Mr. Kelly, “I believe his innocence will be proved in court.”

Prosecutors signaled further charges could be ahead, saying they suspected Messrs. Ghosn and Kelly of making similar misstatements in Nissan financial reports for the three years ended March 2018. They said they suspected the understatements were $38 million for those three years, bringing the total unreported income for the eight years through March 2018 to more than $80 million.

Messrs. Ghosn and Kelly have been in jail since Nov. 19 as part of an interrogation period permitted under Japanese law. Normally, they would be eligible to request bail after formal charges were filed. But by laying out additional suspicions, prosecutors can reset the clock and get about three more weeks of detention without the possibility of bail, meaning the two men are likely to be detained through the end of year.

Even when the defendants do become eligible to seek release on bail, authorities are likely to turn down the request for the time being unless they have confessed, lawyers not involved in the case said.

Messrs. Ghosn and Kelly face up to 10 years in prison if convicted. Nissan faces a maximum fine of up to ¥700 million ($6.25 million) for each year of incorrect financial reports if convicted. Japan has a high conviction rate. More than 97% of criminal cases have resulted in a guilty verdict in recent years.

So far prosecutors haven't filed charges or raised suspicions about several allegations made by Nissan involving Mr. Ghosn’s use of company assets in the weeks since his arrest. A company investigation alleged Mr. Ghosn used a Netherlands-based Nissan subsidiary to purchase multimillion-dollar homes in Rio de Janeiro and Beirut for his personal use, people familiar with that investigation say. Nissan is also examining Mr. Ghosn’s use of his company plane, the people say.

In public statements, prosecutors have discussed only the alleged misstatements on Nissan financial reports. They have not said anything about possible misuse of company funds. Nor have they discussed taxes or tax evasion in connection with Mr. Ghosn.

The Ghosn family believed the residences in Rio de Janeiro, Beirut and other locations were corporate housing whose purchase went through the normal channels for Nissan approval, a person familiar with the family has said.

The arrest of Mr. Ghosn came amid growing boardroom turmoil at Nissan and an increasingly rocky relationship with alliance partner Renault SA, which owns a 43% stake in the Japanese auto maker and appoints three of Nissan’s nine board members.

Mr. Ghosn was planning to replace Nissan Chief Executive Hiroto Saikawa over objections about Mr. Saikawa’s business decisions, according to people with knowledge of the matter.

The future of the three-way alliance between Nissan, Renault and Mitsubishi Motors Corp. is hazy without its chief architect, Mr. Ghosn. He had been working on a plan to cement the alliance, but some Nissan executives were wary of Renault’s influence over business decisions.

Publicly, the three companies have said they hope the partnership will continue. The French government, which owns a 15% stake in Renault, has said it continues to support the alliance. Japanese Prime Minister Shinzo Abe told a news conference Monday he believed the stability of the alliance was important.

But behind these public comments, employees at Renault and Nissan speak of a lack of trust between the companies. Some Nissan workers complain that their company, the larger and more profitable of the two, does all the hard work of building technology and increasing sales. A big portion of Renault’s profit comes from the dividend it earns from owning Nissan shares.

Some at Renault, for their part, hark back to Renault’s rescue of Nissan from near bankruptcy in the late 1990s and believe the Japanese auto maker should have more respect for its biggest shareholder.

Carlos Ghosn Re-Arrested on Suspicion of Shifting Personal Losses to Nissan

Dec. 20, 2018 9:47 p.m. ET

TOKYO—Nissan Motor Co.’s former Chairman Carlos Ghosn was rearrested Friday on suspicions of shifting personal losses to Nissan, derailing his plans to file for bail.

As a basis for detaining Mr. Ghosn further without bail, prosecutors cited a suspicion that he forced Nissan to bear ¥1.85 billion ($16.6 million) in losses from a derivative transaction made by a company personally owned by Mr. Ghosn. Prosecutors said this happened in October 2008 in the midst of the global financial crisis and, if confirmed, would constitute a violation of Japan’s company law.

The move by Tokyo prosecutors potentially resets the clock on a period of detention during which he is ineligible for bail. Prosecutors have two days to make an application to the court for this 10-day period of detention. That detention period can be extended once for a total of 20 days.

Mr. Ghosn was indicted on Dec. 10 on charges of underreporting his compensation on Nissan’s financial statement over a five-year period ended March 2015. At the same time, prosecutors rearrested Mr. Ghosn on suspicions he underreported his compensation for the three years ended March 2018

On Thursday, prosecutors suffered a rare loss after a judge rejected their request to hold Mr. Ghosn for 10 more days without the possibility of bail on the basis of those additional suspicions.

It is very rare for a court to reject a request to extend the detention period, said Tokyo deputy chief prosecutor Shin Kukimoto on Thursday.

Mr. Ghosn’s lawyer, Motonari Otsuru, filed a petition for bail after prosecutors lost the hotly contested detention hearing, according to a person familiar with Mr. Ghosn’s legal defense. The new arrest came shortly before the scheduled bail hearing on Friday.

Mr. Otsuru said his client hopes to restore his honor at trial. Japanese broadcaster NHK first reported Mr. Otsuru’s comments.

Carlos Ghosn, Former Nissan Chairman, Is Arrested on New Allegations

April 3, 2019

TOKYO—Former Nissan Motor Co. Chairman Carlos Ghosn was arrested again in Tokyo early Thursday over new suspicions of financial misconduct less than a month after he was released on bail.

Prosecutors descended on Mr. Ghosn’s Tokyo apartment in an early-morning move, according to footage on public broadcaster NHK, and later brought him to the Tokyo prosecutors’ office.

A representative of Mr. Ghosn confirmed his arrest.

“My arrest this morning is outrageous and arbitrary,” Mr. Ghosn said in a statement released by a representative. “Why arrest me except to try to break me? I will not be broken. I am innocent of the groundless charges and accusations against me.”

Prosecutors were expected to lay out their new suspicions against Mr. Ghosn later Thursday.

Nissan has investigated whether Mr. Ghosn funneled millions of dollars in company funds through an Omani car distributor for personal use, possibly including the purchase of a yacht, according to people familiar with the matter. Nissan has also investigated whether the Omani company helped fund an investment company partly owned by Mr. Ghosn’s son, they said.

“The position of Carlos Ghosn is simple and clear: There is nothing here that can be criticized. These are normal payments linked to business,” said Jean-Yves Le Borgne, Mr. Ghosn’s lawyer.

NHK said prosecutors would cite the Oman connection as the basis for detaining Mr. Ghosn again.

Mr. Ghosn was released on bail March 6 after being charged with financial crimes. He was first arrested on Nov. 19.

Prosecutors can hold Mr. Ghosn for 48 hours after his arrest. After that, they need court permission to detain him for an additional 10 days and that period can be extended by a further 10 days with court approval. That means Mr. Ghosn could face questioning behind bars over the Oman matter for about three weeks. After that, prosecutors would have to decide whether to indict him on additional charges or release him.

Thursday’s events came less than a day after Mr. Ghosn set up a Twitter account and tweeted that he planned to hold a news conference April 11 “to tell the truth about what’s happening.”

In his statement, Mr. Ghosn said: “After being wrongly imprisoned for 108 days, my biggest hope and wish today is for a fair trial.”

Previously, Mr. Ghosn was charged with misstating deferred compensation on Nissan’s annual financial statements submitted to regulators and funneling Nissan money to the business of a Saudi friend who helped him with a personal financial problem.

Mr. Ghosn has said he had hypothetical discussions about future compensation but the amount wasn’t fixed and so it didn’t have to be reported. He has said Nissan paid the Saudi company for “critical services that substantially benefited Nissan.”

‘It Was Scary as Hell’: The Re-Arrest of Carlos Ghosn Opens New Front in Inquiry

April 4, 2019

TOKYO—When Carlos Ghosn, still in his pajamas, heard the doorbell of his Tokyo apartment ring at 5:50 Thursday morning, he knew his brief month of freedom was about to end, said his wife, Carole.

“My husband jumped out of bed and opens the door and there’s maybe 20 prosecutors and their assistants,” Mrs. Ghosn said in an interview.

It was the start of a morning that left Mrs. Ghosn near tears. She wasn’t allowed to call her lawyer or an interpreter—or even go to the bathroom without a female prosecutor watching over her. Her passport was seized, as well as her cellphones.

And within hours, her husband, the former chairman of Nissan Motor Co., was behind bars again at the Tokyo Detention Center, a month after he got out.

Thursday’s arrest—the fourth for Mr. Ghosn—sharpened the divide in a case that has tested the reputations both of a globally prominent executive and of the justice system in the world’s third-largest economy.

Prosecutors for the first time brought forth specific suspicions that Mr. Ghosn pocketed Nissan money, bolstering their picture of a greedy executive who abused his position for personal gain.

Mrs. Ghosn said the day’s events underscored her concern about a system that she said trampled suspects’ rights and undermined her husband’s ability to prove his innocence, which he has maintained throughout.

Before Thursday, Mr. Ghosn had been charged with financial crimes. But the new suspicions raised by prosecutors mark the most serious threat to Mr. Ghosn yet because they go beyond theoretical damage to Nissan and depict him directly enriching himself and his family with company money, outside lawyers said.

“This was the one prosecutors were really chasing after,” said Chuko Hayakawa, a lawyer and former ruling-party member of Parliament.

Prosecutors say Nissan paid $15 million to an overseas distributor, identified as Oman’s Suhail Bahwan Automobiles by Nissan’s internal investigation, and $5 million of that went to a company controlled by Mr. Ghosn.

Prosecutors didn’t say what Mr. Ghosn did with the money. Nissan’s investigation, according to people familiar with it, found evidence that some of the money paid by the car maker to its Omani distributor ended up funding a yacht for Mr. Ghosn’s family and an investment fund in the U.S. partly owned by Mr. Ghosn’s son.

A Ghosn representative said this week that neither Mr. Ghosn nor his family received benefit from Nissan payments. Mrs. Ghosn declined to discuss the allegations.

Yasuyuki Takai, a former prosecutor who has also defended prominent executives, said the new suspicions represented a greater level of danger for Mr. Ghosn. Compared to the allegations in previous indictments, which sometimes put prosecutors in novel legal territory, the new suspicions involve a classic type of corporate wrongdoing that would more easily lead to a guilty verdict if enough evidence is presented, Mr. Takai said.

Still, prosecutors have yet to present that evidence publicly, and Mr. Ghosn reiterated Thursday in an emailed statement that he was confident of vindication if he receives a fair trial.

Representatives of Suhail Bahwan Automobiles, controlled by an Omani billionaire who is a friend of Mr. Ghosn, didn’t respond to requests for comment.

Junichiro Hironaka, Mr. Ghosn’s lead lawyer, said prosecutors confiscated notes and documents related to Mr. Ghosn’s legal defense.

“The fact that these were taken go against his right to a fair trial,” the lawyer said. “This is an outrage that should never happen in a civilized country.”

The deputy chief prosecutor in Tokyo, Shin Kukimoto, said aggressive measures were needed to prevent Mr. Ghosn from destroying evidence and the investigation wasn’t about pressuring him into a confession. “This isn’t about what kind of backbone a person has,” Mr. Kukimoto said.

Since his release, Mr. Ghosn has been living in a small Tokyo apartment. He knew his arrest was imminent after reading local news reports Wednesday, Mrs. Ghosn said.

Mr. Ghosn also faces potential legal jeopardy in France. Renault SA, the French auto maker that he led until this year, accused him Wednesday of ethical violations for the first time, saying a joint probe of its alliance with Nissan had found what could be millions of euros in questionable expenses.

Renault said it had informed French prosecutors about payments to a distributor in the Middle East. People familiar with the matter said Renault’s CEO office, while under Mr. Ghosn, made millions of euros in payments to Suhail Bahwan Automobiles

Mr. Ghosn already spent 108 days at the Tokyo Detention Center after his arrest Nov. 19. In the wake of the new arrest, prosecutors can interrogate him there for about three weeks if a court approves, after which they would have to indict him or release him.

Outside lawyers said that if Mr. Ghosn is hit with further charges, he might have to stay behind bars until his trial begins.

Renault Board Says Probe Finds Questionable Expenses

April 4, 2019

PARIS—Renault SA said a probe of its alliance with Nissan Motor Co. has found what could be millions of euros in questionable expenses, as the French auto maker accused Carlos Ghosn, its former chief, of ethical violations for the first time.

Renault and Nissan for months have been running parallel, but largely separate probes after Mr. Ghosn’s arrest. The investigation of a unit overseeing the auto alliance opens a new front, as an audit of Dutch subsidiary Nissan of RNBV cuts across both companies and delves into areas that could have escaped the corporate governance of either company.

“Certain expenses which have yet to be precisely quantified, but may amount to several million euros since 2010, raise serious questions as to their conformity with RNBV’s corporate interest,” the Renault board said after reviewing the audit’s interim conclusions.

The board also said that “serious deficiencies” in RNBV’s financial transparency and spending control procedures were found in the probe.

Renault’s board also released some conclusions of its own internal probe of Mr. Ghosn. Expenses incurred by the former CEO “are a source of concern, as they involve questionable and concealed practices and violations of the group’s ethical principles, particularly concerning relationships with third parties,” the board said, marking its first ethics accusations against Mr. Ghosn.

The board said it had informed French prosecutors of payments the company made to a Renault distributor in the Middle East. Renault found that its CEO office, while under Mr. Ghosn, sent millions of euros to Suhail Bahwan Automobiles, a distributor in Oman, over a number of years, according to people familiar with the matter. Renault said it reserved the right to bring action before French courts.

Jean-Yves Le Borgne, Mr. Ghosn’s Paris-based lawyer, said the transactions were normal payments for business purposes. Suhail Bahwan Automobiles hasn’t responded to requests for comment.

Investigators in the audit of the Dutch subsidiary have scrutinized payments to consultants at RNBV as well as the use of private jets by Mr. Ghosn and other executives, according to people familiar the investigation.

The probe has also examined payments for a trip for 20 people to Brazil for Carnival last year and a party held at Galerie des Batailles at Versailles to celebrate the 15th year anniversary of the Renault-Nissan Alliance, according to these people. People close to Mr. Ghosn have said that the money spent on these events were legitimate business expenses.

You may not have noticed it in the marketplace, but Nissan is in the midst of a five-alarm crisis at the moment and plans to shed at least 12,500 jobs around the globe. The automaker has been in a slow-burning financial slump for the past year, but it has now evolved into a crisis that appears to have accelerated wildly just in the past three months.

The roots of the crisis are complex, but at its core Nissan pursued a strategy of volume first for much of the past decade under Carlos Ghosn. The strategy worked well when demand boomed during the economic recovery, but in the past two years it's led to high operating costs, excess production capacity, and low per-unit profits in addition to a much lower operating profit margin than its competitors. For example, during 2018, Toyota's operating profit margin was over 8 percent, while Nissan's was 4 percent. Halfway through 2019 it is now 0.1 percent, according to the recent quarterly results made public days ago.

The last three months have been particularly damaging for Nissan globally: net income shrank by 99 percent in the period of April to June 2019, and revenue dropped by another 13 percent, according to Automotive News Europe. During this short time period, Nissan's global volume also shrunk by 6.0 percent. All of this happened basically in a matter of months.

In a drive to reduce its production volume and footprint, Nissan now plans to cut 9 percent of its global workforce, and shrink its 60-vehicle lineup across Nissan, Infiniti and Datsun brands by 10 percent. Once a chaser of volume in the U.S., Nissan currently has a number of models that could be cut from the lineup to reorient the company.

Here are 8 models, listed in no particular order, that Nissan, Infiniti and Datsun could probably get by without as the automaker moves to cut costs.


The Versa range is one of the main players in the very small and very inexpensive segment, but the Versa sedan, like the Mitsubishi Mirage sedan, isn't doing anything for the brand other than serving as a rental fleet model that isn't generating cash for the company. It's also very old at this point, and dealers are basically chasing loose coins selling it. Nissan still has the Sentra, after all, for a small sedan.
3. Infiniti QX60

The QX60 has been around since 2013 and was formerly known as the JX35 -- that's how old it is at this point. Ideally, Infiniti should have one midsize SUV instead of two, but with the QX50 being all-new this year it isn't likely to be cut right away -- the massive QX80 can cater to those needing maximum interior room if Nissan chooses to axe the QX60.


4. Nissan Maxima

The Maxima has been around for almost five years at this point, and arrived just as the sports sedan segment was starting to shrink quite a bit. The Maxima offers a plush interior and some very premium options to those willing to pay for them, but it has had to battle other Japanese sedans for sales this whole time while their sales have also shrunk. Ideally, Nissan can keep the Altima, priced $10,000 lower than the Maxima, and choose not to play in an ever-shrinking segment.


5. Nissan 370Z

The 370Z coupe and roadster are about a decade old at this point, and their sales aren't exactly keeping Nissan dealers afloat. The 370Z was basically on its way out, but if the current financial climate at Nissan persists, it will be difficult to create a replacement from scratch. This means the nameplate is likely to go on hiatus.


6. Nissan Pathfinder

The Pathfinder is priced identically to the smaller Murano (yes, really), but it has the disadvantage of having been in production since 2012. That makes it feel about 20 years old. Ideally, Nissan should have redesigned this model (to not feature a CVT, among other things) years ago, but it had not committed the funds to redesign it. The result is that it feels very old in the marketplace. Will Nissan now have the money to redesign this model, or is it more prudent to just rely on the Murano, which does not have three-row capability? That's a tough position to be in, but the Pathfinder will have to be replaced or cut soon in any eventuality.


7. Nissan NV200

Nissan's small NV200, which has been around since the early part of the decade, sells about 18,000 units per year in the U.S. Those numbers are nothing to write home about, and as most are fleet sales they're not the models keeping the lights on for dealers. Nissan still has the larger NV Cargo model for commercial sales, which at least does a lot more business with plumbers and electricians.


8. Datsun on-DO

The on-DO is one of the oldest models in Datsun's lineup, having debuted in 2014 in a number of overseas markets, and it's now being upstaged by Datsun's pocket-sized crossovers as consumer tastes have shifted. As the rest of the lineup is composed of hatchback bodystyles, it may be difficult to justify the on-DO without either redesigning it soon or cutting it from the lineup.

Nissan Slashes Forecasts as Sales and Profit Fall on Weak Demand

Nov. 12, 2019

YOKOHAMA, Japan— Nissan Motor Co. slashed its outlook for the full year after reporting another quarter of declining sales and profit.

The results released Tuesday showed the car maker struggling to overhaul its business, hurt both by a downturn in the global auto industry and turmoil within the company in the year since the arrest of former Chairman Carlos Ghosn.

The company cut its operating profit forecast for the year ending March 2020 by more than a third to ¥150 billion ($1.37 billion), in part because of slower-than-expected sales in the fiscal year so far. The company trimmed its full-year global sales forecast by 300,000 vehicles to 5.24 million, and said it expected global revenue for the year of about $97 billion, down more than $6 billion from the previous forecast.

China has proved especially painful for Nissan. In May, the company said it would increase sales in China to offset declines in the U.S. Now it expects declines in both countries.

While U.S. sales fell in the July-September quarter, the company is seeing the first signs of a turnaround, said Stephen Ma, a Nissan executive tapped to take over as chief financial officer next month. Operating profit in the U.S. was nearly flat, which means Nissan’s plan to boost how much it makes from each sale is working, Mr. Ma said.

“It’s going in the right direction. With the new Versa and also new Sentra, and new models coming this year, I expect these trends to continue going forward,” he said.

However, the U.S. market has continued skewing toward trucks and sport-utility vehicles, making it hard for companies to profit from small cars like the Versa and Sentra.

Even the revised operating-profit forecast looks difficult to reach because Nissan got only about one-fifth of the way there in the first six months of its fiscal year.

Nissan said operating profit fell 70% to $274 million in the July-September quarter from a year earlier. Revenue declined 6.6% to $24 billion for the quarter, as sales declined 7.5% to 1.27 million vehicles.

Nissan in July announced broad production cuts and plans to lay off around 9% of its global staff. Asked whether Nissan needed further cuts, Mr. Ma said the company would take into account its downgraded sales outlook while assessing that issue.

Nissan Loses $6.2 Billion as It Prepares to Slim Down

May 28, 2020

Nissan Motor Co. recorded a $6.2 billion loss in the year ended in March after it took big write-downs as part of a restructuring plan that aims to make the car maker leaner and more profitable.

Nissan said Thursday it booked ¥603 billion ($5.6 billion) in restructuring costs and impairment losses, leading to a net fiscal-year loss of ¥671 billion. Previously, Nissan had forecast a much smaller loss based on its operating performance, but it had warned that one-time charges might widen the figure.




The company’s shares rose 8.2% in Tokyo trading Thursday, before the loss announcement, as investors bet that the worst of its troubles were over.

Nissan Chief Executive Makoto Uchida said the company had gone astray by seeking “excessive sales expansion.” He said its new strategy is “maintaining financial discipline and focusing on net revenue per unit to achieve profitability.”

The company said it would reduce annual production capacity by 20% to about 5.4 million units a year and close a factory in Barcelona, Spain, eliminating 3,000 jobs. It said it would aim for cost savings of ¥300 billion a year, confirming an earlier Wall Street Journal report.

The auto maker said it had ample cash on hand to weather a difficult business environment. It said it raised ¥712.6 billion in April and May to respond to the coronavirus pandemic and had unused credit lines totaling about ¥1.3 trillion.

Nissan’s global sales fell 42% in April from a year earlier, but its business has begun to pick up in China, one of its core markets alongside North America and Japan under the new strategy to divide up the global car business with alliance partner Renault SA .

https://thedriven.io/2020/05/27/fran...auto-industry/
We need a motivational goal: Make France Europe’s top producer of clean vehicles by bringing output to more than 1 million electric and hybrid cars per year over the next five years,” Macron was quoted as saying by Automotive News Europe.
Renault will also move development of a 100kW electric motor that it had slated for Asia to its factory in Cleon, France, Automotive News Europe reported, while PSA would produce an all-electric 3008 compact SUV in Sochaux.

Nissan is trying to make it easier to buy your next car from the couch with a new program it’s calling “Nissan@Home.” The program ran as a trial at seven dealerships over the summer, but Nissan says it’s expanding throughout the rest of the country over the next few months.

At its core, the program creates a Nissan@Home hub on Nissan’s website where customers can go through a number of steps you might go through at the dealership. You can build your ideal car, find similar inventory, estimate your payments, look through a digital brochure, attain an internet quote and book a test drive from the hub. It’s a fairly comprehensive one-stop-shop, and it looks like you can book a test drive for anything, even a GT-R.

The dealer is not eliminated from the picture entirely, but it does limit your physical in-person contact. That’s great for Covid-19 prevention, and it’ll be great going forward if you prefer to do your car shopping at home. If you prefer to never have any physical contact with the dealership, that’s doable. You can take delivery from home, or you can transition into the dealer at any point throughout the process.

Nissan says that all seven dealers who participated in the trial run liked the results and encouraged Nissan to roll out the service nationwide. It’ll be available for all dealerships to enroll in over the coming months, but no dealers will be required to adopt the process. At this rate, Nissan hopes that it’ll be a widely available service come spring 2021.

First, Nissan doubles down on subprime lending. Now it’s willing to pay dealers more money when customers take out longer terms. This is the new plan Nissan has laid out for dealers, according to a report from Cars Direct.

Nissan is calling this the future of NMAC dealer compensation, referring to its finance arm, Nissan Motor Acceptance Corporation. In the plan, when customers finance their loans through NMAC Nissan will pay dealers 1 percent of the total amount financed.

But it gets better.

Cars Direct says that in the fine print you’ll learn dealers will get as much as $450 when customers go with 84-month financing. Nissan seems to be willing to steer people into financially precarious loans for the benefit of dealers’ profits. It’s not putting the customer first.

This all has the potential to be bad on many fronts. The main problem is that it disproportionally affects — or outright targets — low-income individuals and minorities.

How? Some dealers may discriminate. Judging people is a thing when it comes to car sales, as demonstrated in a 2018 test conducted by the National Fair Housing Alliance using two couples at dealers in Virginia, one Black and one white. Their findings showed that 63 percent of the time, the Black customers received higher interest rates on their loans, even though they were more qualified than their white counterparts. The potential effect is that buyers with higher interest rates would choose longer terms to lower their monthly payments.

This all also ties into another problem. Dealers will be inclined to offer customers longer terms to earn higher compensation for the dealership. Dangling the lower payments that come with 84 and 96-month loan terms could get customers into trouble as the loans go underwater — owing more than the car’s value — especially with brands and models that have steep depreciation curves.

Nissan is one of those brands. An Altima for instance, with an assumed selling price of $26,453 will depreciate 59 percent after just five years. That much depreciation in five years of a seven-year loan with a high interest rate? It doesn’t bode well for anyone. The sad part is, I’m sure Nissan dealers would be more than OK to welcome these customers back, rolling that negative equity into another loan to again line their pockets.

With its Leaf, Nissan was the first mainstream, full-line automaker to offer a widely available, mass-produced electric vehicle in the U.S.

That was eleven years ago. And while it’s taken Nissan that long to push out a second EV model, the Ariya, the carmaker has made clear that the two models will coexist in the lineup.

The new Ariya, due to arrive for first deliveries this fall, will be offered in a full lineup including nine different models. So far Nissan has detailed four of those, with a larger 91-kwh (87-kwh usable) battery pack and delivering up to 300 estimated miles of EPA range. A standard-size 65 kwh (63-kwh usable) battery pack will be paired with some or all of the other five models and will offer something closer to the 215 miles (or 226 miles) currently offered by the Nissan Leaf Plus and its big 62-kwh pack.

Nissan’s e-4orce all-wheel drive system, which fully fuses the controls for its dual motors with suspension behavior and handling stability, is the star of the lineup and will arrive in late fall. But front-wheel-drive models with both packs will start arriving in early fall.




While Nissan has teased a starting price for models with the big pack, of $45,950, it’s said that pricing for models with the smaller pack will start “around $40,000.”2023 Nissan Ariya (Japanese spec)

Yes, that means the Ariya will cost effectively the same as a Nissan Leaf Plus, in its popular middle SV trim, less than two years ago.

While some misunderstood the move to say that Nissan planned to replace the Leaf with the Ariya, this is not the case, Aditya Jairaj, Nissan's U.S. director of EV marketing and sales strategy, recently underscored to Green Car Reports.

“When we’ve got both cars on the market, there will be a specific spot for each model,” Jairaj said. “For example—the model year 2022 Leaf—we repositioned the Leaf; the place in our lineup shifted a little bit.”

With that “repositioning,” for the 2021 model year, Nissan dropped prices on the Leaf by more than $4,000. That made the standard Leaf with the smaller battery the cheapest electric car in the U.S. market.




According to Jairaj, that made room so customers could distinguish the difference between the two all-electric models across the showroom. “When the customer comes into a dealership, they cross-shop your models first, and then they cross-shop competitor models—so we have to make sure that our lineup is robust,” he explained. 2021 Nissan Leaf SL Plus

And that leads to an important point. If buyers are eligible (via tax liability) for the $7,500 federal EV tax credit, the standard Leaf base price of $28,375 and the Leaf Plus starting price of $33,375 effectively amount to $20,875 and $25,875, respectively.

It also means that the base Ariya will check in at an effective starting price of $33,500 if you can claim the credit.

That’s a bargain next to the Tesla Model Y, which starts around $60,000 and isn’t eligible for the credit. It’s also competitive with tax-credit-eligible base models of the Volkswagen ID.4 and Hyundai Ioniq 5. Although an additional base version of the VW ID.4 arriving in 2023 will undercut them all, with an expected price of about $36,000 before the credit.




Only Tesla and GM vehicles aren’t eligible for the tax credit. They long ago reached a race ribbon of 200,000 qualifying EVs (battery electric and plug-in hybrid). Over the next year and a half, Toyota, Ford, and Nissan are expected to be the next three automakers to reach 200,000, triggering a four-quarter phaseout period.2023 Nissan Ariya

According to an analysis from EVAdoption, Toyota will likely hit that in Q1 2022 and Ford will in Q3 2022 (or earlier, with E-Transit, F-150 Lightning, and Mach-E all qualifying by then). But Nissan won’t hit that magic number until Q2 2023 or later.


Timelines for Toyota, Ford, Nissan reaching 200,000-vehicle tax-credit phaseout - EVAdoption

Meanwhile, the EV tax credit itself did look bound for a revitalization this year, but with the Build Back Better bill now stalled indefinitely, that’s increasingly unlikely.

Nissan’s Jairaj admitted that the tax credit is an important piece of how the two EVs are positioned—and how Ariya and Leaf will coexist. “Leaf has a very specific place in our lineup. And the tax credit helps; it makes it more affordable,” said Jairaj. “The reach of the Leaf is definitely much more thanks to the tax credit.”




Jairaj said that whether the tax credit does or doesn’t continue, that “has some implications” on how Leaf might be positioned.

“We have to make sure that the customer is getting what they want, otherwise none of the equation works.”

With about 5 billion consumer-driven miles and 160,000 Leafs in the U.S., Nissan also argues that it has a better understanding than other full-line automakers of what customers want—and the potential pain points. So those smarts will be applied to Ariya.

That will likely be long enough to carry the torch over to a long-awaited Leaf replacement—expected to be previewed by the Chill-Out concept shown late last year.




“For Nissan it’s all about having the right product at the right price at the right time,” added Nathan Sneddon, Nissan’s senior manager for U.S. product planning. “Our belief is definitely that it’s the right product for a certain position—and it will continue to remain in the lineup so long as that fact remains.”

Although many would argue that Nissan’s followup to the Leaf has been a painfully long time coming, two EVs, at two very relevant price points, is a good statement of intent for the future.

Nissan has announced that it will officially leave the Russian market for good. The move is said to be “imminent,” according to a press release dropped by the Japanese automaker, which comes after their Executive Committee has just approved the sale of its local operations to NAMI, the Central Research and Development Automobile and Engine Institute.
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As a result of this move, Nissan’s local branch will transfer its entire operations under its new legal entity, and this will include future passenger vehicle projects, as well as the Sales and Marketing Center in Moscow, and the Research and Development facilities in St. Petersburg, all of which will operate under a new name.

It’s not irreversible, because if the automaker feels like there’s a good reason to return to the Russian market, then they will do so, as the terms of sale would allow them the option to buy back everything, and resume its operations, over the next six years. When it comes to the employees, Nissan claims to have found “the best possible solution,” as they will receive 12-month protection.

“On behalf of Nissan, I thank our Russian colleagues for their contribution to the business over many years,” said the company's President and CEO Makoto Uchida. “While we cannot continue operating in the market, we have found the best possible solution to support our people.”

Their ‘Ambition 2030’ plan shouldn’t be affected by this move, even if they assumed zero activity in the Russian market this fiscal year, and they promise to stay focused on their original goals. Leaving the market comes as little surprise, as they extended the suspension of its local factory for three months in September. As for the financial hit as a result of this exit, Nissan estimates it at approximately 100 billion yen, equaling to nearly 690 million U.S. dollars, said to be “a one-off impact.”