Nissan CEO: Stock mirrors industry woes
Yuri KageyamaNissan Chief Executive Carlos Ghosn sought to allay fears about the company's declining share price Wednesday, saying the damage was coming from soaring oil costs, a U.S. economic slowdown and other factors that were hurting all automakers.
Ghosn, who also serves as head of the Japanese automaker's alliance partner Renault SA, told a shareholders' meeting that a stagnant Japanese auto market and rising steel and materials costs were also to blame.
Nissan shares have fallen 37 percent over the last year and a half and 14 percent since the start of the year. On Wednesday, they dipped to 895 yen ($8.30).
In outlining Nissan's five-year plan through 2012, Ghosn vowed that Nissan would continue to grow in the years ahead by expanding in emerging markets such as China, Russia, India and Brazil. He acknowledged, however, that the same kind of growth cannot be expected in the traditional markets of the U.S., Europe and Japan.
But he said Nissan has good strategies that will not be changed because of share fluctuations.
He outlined to shareholders some of those strategies, including Nissan's cheap "entry-level car," promised for 2011, to respond to the needs of emerging markets.
The company is also working on a zero-emission electric vehicle to address ecological concerns, Ghosn told more than 2,000 shareholders gathered at a convention center in Yokohama, southwest of Tokyo.
"I don't think what we are seeing today is related to the performance of the company," Ghosn said in response to a shareholder's question about Nissan's faltering stock price.
He pointed out that Toyota Motor Corp.'s stock, down 15 percent this year, was not faring any better. The entire Japanese stock market was also suffering, he said.
At the meeting, Ghosn fielded a range of questions, including response to the increase in elderly drivers, the outlook for the North American market and executive pay.
One of the proposals, which passed at the meeting by applause, granted 390 million yen ($3.6 million) bonuses total to nine directors for the fiscal year just ended.
Ghosn acknowledged Nissan's executive pay was far higher than the compensation at Toyota, but he said that was because Toyota executives were almost all Japanese, while a quarter of those at Nissan were non-Japanese, requiring that their pay reflect "global standards."
But Ghosn warned that despite consumers' resistance to price hikes, Japanese automakers may need to raise their prices to meet higher costs for raw materials and energy.
"As an industry, we have been weakened," he told shareholders.
Nissan, as well as Toyota and other manufacturers, have already raised the U.S. prices of some models.
Japanese automakers, while faring better than American rivals General Motors Corp. or Ford Motor Co., are all struggling to maintain profits amid a stronger yen, higher material costs and sluggish U.S. and Japanese markets.