New Nissan CEO paves ways for renewed Honda merger talks

Nissan has forced now former CEO Makota Uchida to step aside and be replaced by a two-decade brand veteran Ivan Espinosa in a dramatic bid thought to have been designed to save its failed merger with Honda.

Refusing to publicly confirm the possibility of restarting talks with Honda, former boss Uchida was rumoured to have been forced to go over a slump in sales and being held responsible for scuttling talks with Honda.

During the merger talks, designed to form the world’s fourth-largest car-maker worth $US60 billion ($A95b), the former Nissan CEO was accused of both “misplaced pride” and “insufficient alarm” over the firm’s dire financial predicament.

Piling on the pressure to remove Uchida were leaked reports that Honda said it would be happy to proceed with negotiations if Nissan would “manage internal opposition”, a veiled reference to the obstructive CEO.

It’s believed Uchida was angry that Honda, which is worth five times more than Nissan, had plans render the smaller partner more of a subsidiary than equal partner.

Without the merger, Nissan faces a grave future, with mounting debts prompting some analysts to suggest it had less than 12 months to live.

According to others, without Uchida at the helm Nissan, may be invited into talks with other partners besides Honda, but with a huge decline in sales in China and the US it will need to act quickly.

Nissan reported a devastating 78 per cent fall in third-quarter profits and was forced to cut its full-year outlook for the third time in February, worrying investors worse news was to come.

Sources speaking to some outlets suggest that, despite publicly claiming it wasn’t interested in a merger, Taiwan’s Foxconn remains a candidate keen for a marriage with the Japanese firm.

Obstacles to overcome include rapidly rolling out hybrid-powered models in the US and, somehow, overcoming the threatened tariffs that will be imposed on Mexico, where Nissan produces vehicles for North America.

While investors demand a race to return to profit in the short-term, analysts suggest that cash-poor Nissan needs to first invest heavily in new product if it has a chance of survival.

Commenting on the appointment of new boss Espinosa, Nissan said that his promotion is part of a drive to "achieve the company's short- and mid-term objectives while positioning it for long-term growth".

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