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Nissan Motor Co., Ltd.: The Rise, Fall, and Fight for Survival of Japan's Global Automotive Pioneer
I. Introduction & Episode Roadmap
On a rain-swept evening in November 2018, a private jet touched down at Tokyo's Haneda Airport carrying one of the most powerful executives in the global automotive industry. Carlos Ghosn, the Brazilian-born, Lebanese-French turnaround artist who had spent nearly two decades building Nissan into a world-beater, made his way through the terminal expecting another routine board meeting. Instead, a customs officer redirected him to a small side room. Waiting there was Tokyo prosecutor Seki, who informed Ghosn of his arrest. Within hours, the architect of one of history's most celebrated corporate rescues would be sitting in solitary confinement at the Tokyo Detention House, his empire crumbling behind him.
Though the first Nissan—actually a Datsun—was produced in 1914, the name Nissan itself didn't truly debut until 1933 when founder Yoshisuke Aikawa listed the Nihon Sangyo Company on the Tokyo Stock Exchange under the ticker name: NISSAN. Today, that ticker symbol represents one of Japan's "Big Three" automakers, a company that has survived wars, oil crises, near-bankruptcy, and now faces perhaps its greatest existential challenge.
The central question of Nissan's story cuts to the heart of modern business strategy: How did a company that pioneered mass-market electric vehicles, survived near-bankruptcy through a legendary turnaround, and built one of the world's most audacious automotive alliances end up fighting for its very existence in 2025?
The answer requires us to traverse more than a century of Japanese industrial history, from the zaibatsu conglomerates of the 1930s through the post-war miracle that brought Datsun to American shores, the near-death experience of the 1990s, the spectacular Ghosn-led recovery, the dramatic arrest and escape that captivated the world, and finally to the failed Honda merger that has left Nissan scrambling for a future.
Along the way, we will encounter themes that resonate far beyond the automotive industry: the perils and possibilities of cross-cultural management, the fragility of alliance structures built on personalities rather than institutions, first-mover advantages squandered through complacency, and the question of whether Japanese corporate culture can adapt quickly enough to survive the electrification revolution sweeping through global transportation.
According to a statement given to the Financial Times, Nissan has between 12 and 14 months to survive. The clock is ticking. Let us understand how one of Japan's industrial champions arrived at this precipice.
II. Origins: The Birth of Japanese Automaking (1911–1945)
The Founders & Early Days
In 1911, in the Hiroo district of Tokyo, a small workshop called Kwaishinsha Motor Car Works opened its doors. Its founder, Masujiro Hashimoto, harbored ambitions that seemed almost comically outsized for such a modest operation. At the time, Japan's roads were barely distinguishable from the dirt paths of the Edo period, and railways dominated long-distance transportation. You could find some paved roads in the Japanese cities of the 1930s, but most roads and streets in those days remained covered with sand and pebbles, just as they had been during the Edo Period (1603-1868). On the other hand, railways had become a favorite means of long-distance transportation among the Japanese people.
Yet Hashimoto persisted. Just three years after founding Kwaishinsha, his workshop built the DAT, a small passenger car whose name would echo through a century of automotive history. The name itself tells a story of early Japanese capitalism: DAT combined the initials of three men who invested in Kwaishinsha—Den, Aoyama, and Takeuchi. Each investor's surname contributed a letter, creating a brand that literally embodied collaborative ownership.
In 1931, DAT came out with a new smaller car, called the Datsun Type 11, the first "Datson", meaning "Son of DAT". Later in 1933, after Nissan Group zaibatsu took control of DAT Motors, the last syllable of Datson was changed to "sun", because "son" also means "loss" in Japanese. This linguistic sensitivity—avoiding a word that phonetically suggested failure—would prove prophetically ironic given the company's future struggles.
Yoshisuke Aikawa & The Zaibatsu Structure
The man who would transform this modest automotive venture into an industrial powerhouse was Yoshisuke Aikawa, an exceptional entrepreneur whose vision for Japanese manufacturing was shaped by direct exposure to American methods. In 1928, exceptional entrepreneur Yoshisuke Aikawa became president of Nihon Sangyo Co. Ltd., the company from which the name Nissan originated. His knowledge of the automotive scene in the United States convinced him cars would become popular in Japan as well.
Aikawa was no ordinary businessman. Yoshisuke Aikawa was a Japanese entrepreneur, businessman, and politician, noteworthy as the founder and first president of the Nissan zaibatsu, one of Japan's most powerful business conglomerates around the time of the Second World War. Aikawa was born in what is now part of Yamaguchi city, Yamaguchi Prefecture. His mother was the niece of Meiji period genrĹŤ Inoue Kaoru. He graduated from the engineering department of Tokyo Imperial University in 1903 and went to work for Shibaura Seisakusho, the forerunner of Toshiba. Although his pay was very low, Aikawa managed to save enough to make a trip to the United States, where he studied malleable cast iron technology.
This period in America would prove transformative. Rather than touring as a visiting dignitary, When he lived in the United States, Yoshisuke concealed his academic accomplishments and worked in a factory, where he developed casting skill. This hands-on approach gave Aikawa an intimate understanding of American manufacturing that few Japanese industrialists possessed.
In 1928, Yoshisuke Aikawa founded the holding company Nihon Sangyo. The name 'Nissan' originated during the 1930s as an abbreviation used on the Tokyo Stock Exchange for Nihon Sangyo. This company was Nissan "Zaibatsu" which included Tobata Casting and Hitachi. The zaibatsu structure—a conglomerate of interconnected businesses under unified ownership—provided the capital and industrial infrastructure necessary for automotive manufacturing.
Aikawa judged that the time was right and organized the establishment of Jidosha Seizou KK in Yokohama on December 26, 1933, founded jointly by Nihon Sangyo (contributing six million yen) and Tobata Imono (four million yen) with an initial capital of 10 million yen. Aikawa was the president of both founding companies, and as a matter of course he was named the president of the new company. At the first shareholders' meeting, held on May 30, 1934, Jidosha Seizou KK was renamed the Nissan Motor Co., Ltd.
American Technology Transfer
Aikawa understood that building an automotive industry from scratch would require more than ambition. Although it had always been Aikawa's intention to use cutting-edge auto making technology from America, it was Gorham that carried out the plan. Most of the machinery and processes originally came from the United States. When Nissan started to assemble larger vehicles under the "Nissan" brand in 1937, much of the design plans and plant facilities were supplied by the Graham-Paige Company.
This willingness to learn from American methods while building Japanese capabilities would become a template for Japan's post-war industrial miracle. Annual production volume was only 202 units in 1933 when the production facility was located in Osaka, but it jumped to 940 units in 1934 when it moved to Yokohama. In 1935, when a 70-meter conveyor line was completed, integrated manufacturing of the chassis and body started, thanks to which annual production reached 3,800 units.
Output increased to 6,163 units in 1936 and 10,227 units in 1937, making Nissan the largest car producer in Asian countries among companies financed with Japanese capital. Nissan also started exporting cars, although the volume was still small.
The late 1930s brought darker times. In 1937, at the invitation of his relative Nobusuke Kishi, he moved to Manchukuo and agreed with the Japanese Kwantung Army's vision of a syndicalist economy and centralized industrial development plan for Manchukuo. He also moved the headquarters of Nissan to Manchukuo, where it became the core of the Manchurian Industrial Development Company. Nissan built trucks, airplanes, and engines for the Imperial Japanese Army.
The war ended badly for Aikawa personally. After the surrender of Japan, Aikawa was arrested by the American occupation authorities and incarcerated in Sugamo Prison for 20 months as a Class A war crimes suspect. Although he was freed before his case came to trial, during this time the Nissan zaibatsu was dissolved.
From these ashes, a new Nissan would emerge—one that would eventually carry Japanese engineering to every corner of the globe.
III. Post-War Rebuilding & Global Expansion (1945–1990s)
Recovery & The Datsun Brand Strategy
When the Pacific War ended, Nissan's factories lay in various states of destruction, its zaibatsu structure dissolved by American occupation authorities, its founder imprisoned. The company faced the stark challenge of rebuilding from scratch in a nation struggling to feed its population.
When the Pacific War ended, Datsun would turn to provide trucks for the Occupation forces. This lasted until car production resumed in 1947. As before the war, Datsun closely patterned their cars on contemporary Austin products.
The strategic decision to use the Datsun brand for exports proved shrewd. Yutaka Katayama (Mr. "K"), former president of Nissan's American operations, would have had his personal wartime experiences in mind supporting the name Datsun. Katayama desired to build and sell passenger cars to people, not to the military; for him, the name "Datsun" had survived the war with its purity intact, not "Nissan".
This was more than marketing sensitivity—it was strategic positioning. The Datsun name allowed Nissan to establish a foothold in foreign countries without triggering associations with Japan's wartime military-industrial complex or directly competing under the corporate name with established local automakers.
Conquering America
Nissan brought its first Datsun models (a 1000 cc car and truck) to the U.S. at the 1959 Los Angeles Auto Show. The timing proved fortunate. American consumers, initially skeptical of Japanese quality, would soon have compelling reasons to reconsider.
The 1970s transformed Japanese automakers from curiosities into powerhouses. The Arab oil embargo of 1973-74 and the Iranian Revolution of 1979 sent gasoline prices soaring, creating urgent demand for fuel-efficient vehicles that Detroit's Big Three were utterly unprepared to meet. While American manufacturers struggled to downsize their gas-guzzling behemoths, Datsun already had precisely what consumers wanted.
The 70s were a great decade for Nissan. Nissan sold the one-millionth Datsun and became the top vehicle importer in the United States by 1975. Models like the Datsun 510, B210, compact pickup, and later the Nissan Sentra won legions of fans for their practicality, performance, and affordability.
Production in Australia and Taiwan followed, with the first American factory opening in Smyrna, Tennessee, in 1983. This Tennessee plant represented a crucial strategic shift—manufacturing in America meant protection from currency fluctuations and trade tensions while demonstrating commitment to the American market.
Iconic Models & The Performance Heritage
While fuel efficiency drove sales volumes, Nissan was simultaneously building a performance heritage that would make its brand legendary among enthusiasts.
The legendary Skyline, first introduced in 1957, was originally built by Japan's Prince Motor Company. Production of the Prince Skyline lasted from 1957 until 1966, when Prince and Nissan merged. With humble origins as a rather modest four-door luxury car, the Skyline began to evolve into a performance-bred sportscar following the merger.
Skyline finally became a Nissan in 1969, when the first performance-bred Skyline GT-R was unveiled at the Tokyo Motor Show. It was still a sedan, but it now boasted an inline six engine and (impressive for the day) 160 horsepower. The first-generation Nissan Skyline was available from 1969-1972.
The GT-R's racing dominance established Nissan's performance credentials in the most convincing manner possible. The original Skyline GT-R won the very first race it entered. Its first defeat came after a string of 49 consecutive victories. From the earliest models to those resurrected in 1989, race-trimmed GT-Rs didn't just beat their opponents—they deprived them of any hope of winning.
The Z-car, introduced in 1969, brought accessible sports car performance to a mass audience. Designed to compete with European sports cars at a fraction of the price, the 240Z became a sensation. The car embodied Nissan's emerging identity: Japanese quality and value wrapped in genuinely exciting packaging.
The Datsun-to-Nissan Brand Transition
In 1981, Nissan made the controversial decision to phase out the Datsun brand in favor of unified Nissan branding worldwide. The move was intended to strengthen international brand identity, but it carried risks—Datsun had built decades of recognition and loyalty in markets where Nissan was relatively unknown.
The 1980s saw rapid overseas expansion, with new plants opening in the UK, Spain, and Taiwan. Key models like the Nissan Sentra, Maxima, and Pathfinder established the company across multiple market segments.
The Infiniti Gamble
In 1989, Nissan launched its Infiniti division to compete in the premium automotive market, particularly in North America. The timing mirrored Toyota's Lexus launch and Honda's Acura, as Japanese automakers sought to capture the higher margins of luxury segments.
The early models, such as the Q45, reflected a focus on luxury and performance. But Infiniti's launch was marred by an infamous advertising campaign that showed natural scenes—rocks, trees, water—without ever showing the actual car. The philosophical approach confused American consumers accustomed to seeing metal and horsepower.
Despite this stumble, Infiniti established a foothold in the premium market, though it would never achieve the success of Lexus. This shortfall would prove symbolic of broader challenges ahead—Nissan repeatedly demonstrated the ability to innovate and compete, but often seemed to fall just short of capitalizing fully on its advantages.
As the 1980s gave way to the 1990s, Japan's economic bubble was about to burst spectacularly, and Nissan would find itself caught in the wreckage.
IV. Crisis & The Renault Alliance: Near-Death Experience (1990s–1999)
The Lost Decade
The 1990s should have been Nissan's golden age. With established manufacturing in Japan, the United States, and Europe, strong brand recognition, and a history of engineering excellence, the company seemed positioned to dominate the coming decades of global automotive growth.
Instead, Japan's bubble economy collapsed, and Nissan found itself drowning in the wreckage. The company had accumulated massive debts through the traditional Japanese keiretsu system—cross-shareholdings with suppliers and banks that provided stability in good times but proved deadly when cash flows turned negative.
In 1999 Nissan had been facing great losses for seven of the past eight years which were now resulting in debts. This was mainly caused by the Japanese business custom of keiretsu investments which left little capital for other investments, like innovations in product designs.
The numbers told a devastating story. By 1999, only 4 models out of 43 available models were generating profits. The rest were bleeding cash, dragging the company toward insolvency. Debt had ballooned to $20 billion and showed no signs of stabilizing.
Product development had stagnated. While competitors refreshed their lineups with innovative designs and cutting-edge technology, Nissan's models grew stale. The company's traditional strengths in engineering were being squandered on vehicles that failed to excite consumers or command premium prices.
The Search for a Savior
Nissan's leadership recognized that survival required outside intervention. The company began searching for a partner or acquirer, but found few willing to touch a Japanese automaker drowning in debt with a product line that had lost its way.
One rival, scoffing at the idea, suggested the French automaker might better load a barge with gold and "sink it in the middle of the Atlantic Ocean." Yet, the deal quickly confounded critics.
DaimlerChrysler explored a partnership but walked away after demanding more than 50% of shares—a level of foreign control that Japanese stakeholders found unacceptable. Ford's CEO Jack Nasser delivered a blunt assessment: the American automaker had no interest in "wasting hard-earned money paying off careless debts."
The Renault Alliance Forms
Into this desperate situation stepped Renault, France's national automaker, under the leadership of CEO Louis Schweitzer. The agreement, signed on 27 March 1999, will create the fourth largest automaker in the world. Louis Schweitzer, Chairman and Chief Executive Officer of Renault, and Yoshikazu Hanawa, President and Chief Executive Officer of Nissan Motor Co., jointly announced a partnership agreement between Renault and Nissan.
Renault will make a major contribution to reduce Nissan's indebtedness, estimated at more than 2 trillion yen (US$16.7 billion). Renault is going to invest 605 billion yen (approximately 4.7 billion euros), by taking a 36.8% equity stake (and corresponding voting rights) in Nissan Motor Co.
The alliance structure was deliberately designed to preserve both companies' independence while enabling deep cooperation. This "win-win" architecture reflected lessons learned from the DaimlerChrysler merger, which was supposed to be a "merger of equals" but devolved into German dominance of American operations.
In 1999, Renault had offered a cooperation model by which the two companies would retain their own identities, have their own corporate strategies whilst cooperating with each other as global partners.
On paper, the complementarity was compelling. Nissan's strength in North America and Asia filled gaps in Renault's geographic footprint. Renault's cash could address Nissan's crushing debt burden. And the two companies' capabilities balanced: Renault was known for innovative design while Nissan excelled in engineering quality.
But executing this alliance would require something more than strategic fit and financial engineering. It would require a leader capable of bridging two cultures, challenging entrenched interests, and delivering results quickly enough to satisfy skeptics on both sides of the world.
Renault had exactly such a person in mind.
V. The Ghosn Era: Turnaround & Triumph (1999–2018)
Enter "Le Cost Killer"
In order to strengthen Nissan's management and ensure the return to profit for the year ending 31 March 2001, Carlos Ghosn, currently Executive Vice President of Renault, will be appointed Chief Operating Officer of Nissan. All the Executive Vice Presidents of the company will report to him.
Carlos Ghosn arrived in Japan in June 1999 as a corporate turnaround specialist with an intimidating reputation. At Renault, his cost-cutting had earned him the nickname "Le Cost Killer"—a moniker that inspired both admiration and fear. Born in Brazil to Lebanese parents, educated in France, and seasoned in the crucible of global business, Ghosn embodied a kind of cosmopolitan pragmatism that was rare in the insular world of Japanese industry.
Ghosn, 64, began his career at tiremaker Michelin in France in the late 1970s before moving on to Renault in 1996. There he helped engineer a turnaround in the carmaker's fortunes that earned him the admiration of the business world—but not of labor unions or leftist politicians, who resented his high salary while he presided over massive job losses.
Japanese industrial observers viewed his appointment with skepticism bordering on alarm. Because Ghosn was a foreigner and not accustomed to the Japanese way of doing business, several industrial business analytics expressed scepticism and concern for this arrangement. The very characteristics that had made Ghosn effective at Renault—his willingness to challenge tradition, cut costs ruthlessly, and override consensus—seemed likely to clash with Japanese corporate culture.
The Nissan Revival Plan
Ghosn's "Nissan Revival Plan", announced in October 1999, called for a return to profitability in fiscal year 2000, a profit margin in excess of 4.5% of sales by the end of fiscal year 2002, and a 50% reduction in the current level of debt by the end of fiscal year 2002. Ghosn promised to resign if these goals were not met.
This personal guarantee was almost unprecedented in Japanese business. By staking his career on specific, measurable outcomes, Ghosn signaled that the old ways of vague promises and deferred accountability were over.
Ghosn's Nissan Revival Plan called for cutting 21,000 Nissan jobs (14% of total workforce), mostly in Japan; shutting five Japanese plants; reducing the number of suppliers and shareholdings; and auctioning off prized assets such as Nissan's aerospace unit.
The keiretsu—the web of cross-shareholdings that had provided stability but trapped capital—would be systematically dismantled. When the Nissan Revival Plan was announced, the proposed dismantling of keiretsu earned Ghosn the nickname "keiretsu killer".
Not just anybody could have managed the Nissan turnaround as well as Ghosn did. For instance, a COO from Japan would not have been able to cut back on keiretsu investments. Because of the Japanese business culture to make these kinds of investments and the Japanese emphasis on cooperation and loyalty, it would have been considered to be a sort of betrayal.
The results were nothing short of spectacular. In the first year of the Nissan Revival Plan, Nissan's consolidated net profit after tax climbed to $2.7 billion for fiscal year 2000, from a consolidated net loss of $6.46 billion in the previous year. Twelve months into his three-year turnaround plan, Nissan had returned to profitability, and within three years it was one of the industry's most profitable auto makers, with operating margins consistently above 9%; more than twice the industry average.
The approach was an overall success in meeting the specific and measurable goal of turning the losses into profits not only on time but 6 months prior to the deadline. The Nissan Revival Plan was achieved one year ahead of schedule and succeeded in reducing their purchasing costs by 20%.
Nissan 180 & Continued Success
With the Revival Plan completed ahead of schedule, Ghosn pivoted from turnaround to growth. In May 2002, Ghosn announced his next set of goals for the company, "Nissan 180", a three-year plan for growth based on the numbers 1, 8, and 0: By the end of September 2005, Nissan planned to increase its global sales by one million vehicles; and by the spring of 2005, it was committed to achieving an operating margin of at least 8% and reducing its net automotive debt to zero. These goals were all reached: In the spring of 2003, Nissan announced that its net automotive debt was eliminated in fiscal year 2002. Nissan's operating profit margin climbed to 11.1% in fiscal year 2003; it had been 1.4% in fiscal year 1999. In October 2005, Nissan announced that its annual sales from 30 September 2004, to 30 September 2005, were more than 3.67 million, up from the 2.6 million vehicles sold in the fiscal year ended March 2002.
He worked hard and took tough measures—even closing down factories—but he succeeded. Worldwide sales grew again and doubled, from 2.4 million in 1999 to 4.8 million in 2011.
Running Two Fortune 500 Companies
In 2005, Ghosn also became CEO of Renault, holding top executive roles at both companies simultaneously. In 2016, he additionally became chairman of Mitsubishi Motors after Nissan acquired a controlling interest in the company, further expanding his influence in the automotive sector.
Born in Brazil, Ghosn became the world's first person to run two companies on the Fortune Global 500 simultaneously when he assumed the CEO roles at both Renault and Nissan in 2005.
Ghosn's dual role was controversial but reflected the reality that his personal credibility held the alliance together. The structure worked precisely because Ghosn could bridge the cultural gaps, resolve conflicts, and maintain trust between two organizations with very different histories and operating styles.
The Electric Vehicle Bet
Perhaps Ghosn's most consequential strategic decision was his early and aggressive bet on electric vehicles. Ghosn led the Renault-Nissan Alliance into the mass-market zero-emission electric car market in a major way, committing €4 billion to the effort.
The Leaf was unveiled on 1 August 2009 as the world's first mass market electric and zero-emission vehicle. Among other awards and recognition, it received the 2010 Green Car Vision Award, the 2011 European Car of the Year, the 2011 World Car of the Year, and the 2011–2012 Car of the Year Japan.
By 2017, the Renault–Nissan Alliance was the world leader in electric vehicles, selling more than twice as many electric cars as Tesla.
This first-mover advantage in EVs seemed to position Nissan perfectly for the automotive industry's electrification revolution. The company had proven that mass-market EVs were viable, had built manufacturing scale, and accumulated more real-world data on EV ownership than any competitor.
Yet this commanding position would be squandered in the years ahead, as leadership turmoil, strategic drift, and competitive intensity transformed Nissan from EV pioneer to also-ran.
VI. The Fall: Arrest, Escape & Corporate Chaos (2018–2020)
The Dramatic Arrest
On 18 November 2018, Carlos Ghosn leaves Beirut to travel to Japan for a Nissan board meeting, scheduled to take place the next day. On 19 November 2018, Carlos Ghosn lands around 4:30 pm in Tokyo. He makes his way to the terminal of Haneda airport where a customs officer tells him there is a problem with his passport. The officer asks him to go into a small side room where the Tokyo prosecutor, Seki is waiting and informs him of his arrest. Carlos Ghosn is then transferred to the Tokyo detention center in Kosuge.
On 19 November 2018, Carlos Ghosn was arrested by Tokyo prosecutors shortly after landing in Japan on a private jet. Nissan alleged that Ghosn had underreported nearly $80 million in compensation and misused company assets, launching an internal investigation against him.
The Nissan board of directors votes unanimously to oust Ghosn as chairman of the company. Kelly is also removed.
The arrest sent shockwaves through the global automotive industry. The stunning announcement ripped through a powerful global alliance, slamming the stocks of Nissan and Renault. Together with Japan's Mitsubishi Motors, Nissan and Renault make up the biggest global carmaking alliance, which makes one of every nine cars sold around the world.
"Hostage Justice"
Carlos Ghosn is then transferred to the Tokyo detention center in Kosuge, for what will be the start of the first period of confinement, which is solitary and lasts 108 days.
Ghosn described conditions as psychological coercion, subject to lengthy daily interrogations without a lawyer present. He labeled Japan's pre-trial system "hostage justice"—a criticism that resonated with international human rights observers who had long questioned the Japanese system's reliance on confessions extracted during extended detention.
The Great Escape
On 30 December 2019, Ghosn fled Japan in violation of his bail. He was transported hidden in a large road case aboard a private jet which flew from Osaka to Istanbul, then to Beirut. He described the move as an "escape from injustice," stating that he faced a judicial system where "guilt was presumed."
The escape was audacious beyond belief. Ghosn, under 24-hour surveillance at his Tokyo residence, was smuggled out concealed in a box designed to carry audio equipment. The operation involved former U.S. Special Forces operatives and a carefully choreographed series of private jet flights.
In 2021, a Japanese court convicted two Americans who helped facilitate the escape and sentenced them to prison.
As of 2025, Carlos Ghosn remains in Beirut under a travel ban, shielded from extradition by Lebanese law. He has stated that he will continue fighting to restore his reputation and expose what he describes as a corporate coup enabled by a flawed justice system.
The Corporate Coup Theory
Ghosn was arrested in November 2018 in a sting after he landed at Tokyo's Haneda airport on a regular business trip. He says the charges of financial misconduct were concocted to block Nissan's fuller integration with its longtime French partner Renault, a plan he was working on at the time.
Ghosn has consistently maintained that the charges were manufactured by Nissan executives who feared that deeper integration with Renault would cost them their autonomy and positions. He named specific Nissan executives and alleged that the Japanese legal system was being used as a weapon in a corporate coup. Ghosn argued that the pattern of re-arrests was designed to keep him imprisoned indefinitely and break his will to fight the charges.
Whatever the truth of these allegations, the immediate consequence was clear: the alliance Ghosn had spent two decades building began to unravel, and Nissan's trajectory shifted from growth to decline.
VII. Post-Ghosn Decline: The Unraveling (2020–2024)
Alliance in Shambles
Losses have totaled nearly $35 billion, $30 billion of that at Nissan and Renault, while their share prices have seen a similar decline—in the case of Nissan, 60%.
The alliance's market share has fallen from 12% to 8% during the past four years. In key markets, Nissan sales in the U.S. fell from 1.5 million in 2018 to 729,349 in 2022; in Europe, from 684,769 to 286,225; and in China, from 1.6 million to slightly more than 1.0 million.
In the two business years since Ghosn's removal from management, Nissan has reported 1.1 trillion yen ($10.1 billion) in net losses; has seen its market capitalization shrink by nearly $8 billion, or more than 40%; is being forced to lay off more than 10% of its global workforce; and must close at least two plants.
The numbers painted a picture of an organization in freefall. Analyst Koji Endo offered a devastating assessment: Nissan "is effectively where it was when Carlos Ghosn arrived in 1999."
The EV First-Mover Squandered
Perhaps no aspect of Nissan's decline is more tragic than the squandering of its electric vehicle leadership. More than 650,000 Nissan LEAF models have been sold since its launch over 12 years ago. For many years, the LEAF was the best-selling electric vehicle, and Nissan was viewed as a forerunner in the EV market.
The Leaf was the world's all-time top selling plug-in electric car until it was surpassed in early 2020 by the Tesla Model 3.
"Nissan has gone from being number one (in EV production) to being virtually nonexistent," says Viktor Irie, an analyst at EV Volumes.
Meanwhile, Nissan has failed to update the compact EV in recent years as sales continue falling. Nissan again announced the 2024 LEAF would feature the outdated CHAdeMO charging, which should have been replaced years ago.
The company that pioneered mass-market EVs allowed itself to be overtaken by Tesla, BYD, and others while clinging to outdated technology and stagnant product designs. First-mover advantage, it turns out, only matters if you keep moving.
Financial Deterioration
Nissan's financial trajectory told a story of steady erosion punctuated by occasional false dawns. After a peak in 2018 with annual revenues of approximately $107.6 billion, revenues declined to $74.9 billion by 2022. A modest recovery followed, with revenues reaching $78.4 billion in 2023 and $87.5 billion in 2024.
But profitability told a grimmer story. In the U.S., the company experienced declining market share attributed to an aging product lineup and a critical lack of hybrid offerings—precisely the vehicles that were surging in popularity as consumers sought fuel efficiency without the range anxiety of pure EVs.
Renault Alliance Restructured
As of November 2023, Renault holds a 15% voting stake in Nissan, while Nissan holds the same stake in Renault. Since October 2016, Nissan held a 34% controlling stake in Mitsubishi Motors. In November 2024, Nissan reduced its stake in Mitsubishi Motors from 34% to 24%.
The rebalancing of cross-holdings represented, in practice, the unwinding of the alliance that Ghosn had built. By the end of 2023, the Renault-Nissan Alliance, which had existed since 1999, is usually described as having come to an end. Common structures, such as the jointly created purchasing company, are dissolved.
A former insider asserted that "If you're going to sell down"—from 43% to 15%—"and there's no central control where anybody has the authority to really push synergies, practically speaking it's a divorce." Ghosn was quoted as saying: "Generally this kind of cross-holding can exist only if there is trust between the parties. When the trust disappears, it's over."
The alliance that had once challenged Toyota and Volkswagen for global supremacy was effectively dead, leaving Nissan to face an uncertain future alone.
VIII. Existential Crisis: The Honda Saga & Beyond (2024–2025)
The 2024 Financial Collapse
Nissan's profits in the six months ending in September plunged 94% compared with the same period in 2023, as the company lost money on auto operations and reported only a narrow profit due to its financing business.
The Japanese company will dismiss 9,000 workers and cut a fifth of its manufacturing capacity after net income plummeted 94% in the first half.
The company cut its annual operating profit forecast by 70% to 150 billion yen ($975 million), marking its second downward revision after a 17% cut earlier this year.
CEO Makoto Uchida has taken a 50% pay cut, acknowledging the company's failure to anticipate the rapid growth of hybrid and electric vehicles.
Nissan's current financial issues stem back to an overly ambitious goal of selling eight million vehicles worldwide, made in 2015. As of 2024, Nissan is well short of those lofty goals and ended the year with sales of 'only' 3.3 million.
Some analysts had speculated Nissan could face bankruptcy as soon as 2026 when it has a huge amount of debt coming due.
The Honda Merger Talks
Desperate circumstances called for dramatic measures. The ambitious US$60bn merger between Japanese automotive giants Honda and Nissan has officially collapsed, ending hopes of forming the world's third-largest automaker. The breakdown of negotiations, which began in December 2024, highlights the challenges traditional car manufacturers face in a rapidly-evolving and highly-competitive industry.
Honda, which has a market value nearly five times that of Nissan, proposed making Nissan a subsidiary—a move that Nissan strongly opposed. Nissan insisted on equal partnership despite its weaker financial position.
A dispute over hybrid powertrains is being cited as one of the key disagreements that led to the collapse of the Honda-Nissan merger deal worth around $60 billion. An English-language Japanese newspaper, The Japan News, claims Honda wanted Nissan to ditch its e-Power hybrid system in favor of its own, more traditional self-charging hybrid powertrain.
The Collapse
Honda and Nissan announced Thursday they were terminating negotiations for a mega-merger that would have created the world's third-largest car company with sales of as much as $194 billion and annual profits in excess of $19 billion.
Nissan CEO Makoto Uchida met Honda CEO Toshihiro Mibe last week to formally end discussions. Mibe said merging would have involved "quick pain" but was ultimately dropped due to concerns over delays.
The chief cause of talks dissolving, however, could be blamed on Nissan's pride and need for independence. The press release says that Honda wanted to pick its own leadership for Nissan, more than likely clearing the executive suite. Additionally, Nissan would be made a subsidiary of Honda. Nissan, apparently, couldn't abide by that.
Nissan's stock fell by more than 4%, reflecting concerns about its solo path forward. In contrast, Honda's shares surged over 8%, indicating investor confidence in its independent strategy.
New Leadership and the Re:Nissan Plan
Espinosa was appointed president and chief executive officer of Nissan in April 2025, stepping into the role at a pivotal moment for the company. On taking the helm, he formulated and launched Re:Nissan, a bold and comprehensive recovery plan designed to reduce costs, redefine Nissan's product and market approach, and strengthen both longstanding and emerging partnerships.
Ivan Espinosa, a 46 year-old Mexican national, will be Nissan's fourth CEO in eight years.
Espinosa joined Nissan in 2003, working as a product specialist in the company's Mexico planning division. He was eventually sent to Thailand as an overseas program director in 2008. Two years later, he returned to Mexico as director of product planning for the region and then was promoted to vice president of product planning for Nissan Europe.
Nissan publicized a recovery plan called "Re:Nissan," which aims to save the company 500 billion yen ($3.4 billion). The cost savings will partly be realized through layoffs affecting 15% of Nissan's 133,580-person global workforce, or about 20,000 workers, to take effect by 2027.
This includes not only job cuts but also reducing the number of Nissan plants from 17 to 10 by FY 2027.
In FY2024, global sales remained at 3.346 million units impacted by intensified sales competition. Nissan's consolidated net revenue was 12.6 trillion yen, resulting in an operating profit of 69.8 billion yen with an operating margin of 0.6%. Net loss was 670.9 billion yen.
Nissan reported a $4.5 billion net loss for the fiscal year 2024 that ended in March 2025.
"We have 12 or 14 months to survive," a senior official close to Nissan told the publication.
IX. Strategic Analysis: What Went Wrong and What's At Stake
Myth vs. Reality
Myth: Ghosn's arrest caused Nissan's decline Reality: While the arrest and subsequent turmoil certainly damaged the company, deeper problems predated 2018. Nissan is in deep trouble, posting huge losses, shutting factories and laying off workers, and some analysts trace the problems all the way back to the tenure of Carlos Ghosn, who ran the company for more than 15 years. They argue that aggressive expansion by the iconoclastic executive left the company overextended. The pursuit of 8 million unit sales created capacity and cost structures that became unsustainable when volumes fell.
Myth: The Renault Alliance failed Reality: The alliance generated billions in synergies and saved both companies from potentially fatal crises. Alliance synergies saved the carmakers $6.3 billion in 2017, according to the company. What failed was the governance structure that depended on a single individual to bridge two corporate cultures. When Ghosn was removed, no mechanism existed to maintain trust and coordination.
Myth: Nissan lost the EV race to superior competitors Reality: Nissan surrendered its EV leadership through neglect. The company had first-mover advantage, manufacturing scale, and the world's best-selling EV—then stopped innovating while competitors invested aggressively. The LEAF's technology stagnated while Tesla, BYD, and others leapfrogged ahead.
Porter's Five Forces Analysis
Competitive Rivalry: HIGH The automotive industry faces unprecedented competitive intensity. Traditional rivals (Toyota, Honda, Volkswagen) are being joined by Chinese EV makers (BYD, Geely, NIO) and tech entrants (Tesla). Scale advantages that once protected incumbents are eroding as EV manufacturing requires different capabilities.
Threat of New Entrants: HIGH EV technology has lowered barriers to entry. Newcomers from China and technology sectors bring different cost structures, software capabilities, and business models. Foxconn's interest in Nissan demonstrates that non-traditional players see automotive as an accessible market.
Bargaining Power of Suppliers: MODERATE-HIGH Battery manufacturers, semiconductor suppliers, and software providers hold increasing power. The shift to EVs concentrates purchasing on fewer, more specialized components. Nissan's reduced volumes weaken its negotiating position.
Bargaining Power of Buyers: HIGH Consumers face more choices than ever, with pricing transparency enabled by digital platforms. Brand loyalty has declined, particularly among younger buyers who prioritize technology and sustainability over traditional marques.
Threat of Substitutes: INCREASING Ride-sharing, autonomous vehicles, and changing mobility preferences threaten traditional car ownership. Urban populations increasingly question whether personal vehicle ownership makes economic or environmental sense.
Hamilton Helmer's 7 Powers Framework
Nissan's strategic position appears weak across most of Helmer's seven sources of competitive advantage:
Scale Economies: Eroded. At 3.3 million units, Nissan lacks the volume needed for world-class efficiency. Toyota produces more than 10 million; even after consolidating to 10 plants, Nissan will have excess capacity.
Network Effects: Minimal. Unlike platform businesses, automotive manufacturing derives limited network benefits. Nissan's charging infrastructure partnership with Tesla's NACS standard is a positive step but represents following rather than leading.
Counter-Positioning: None. Nissan is stuck in the middle—lacking Tesla's technology brand, Toyota's hybrid dominance, or Chinese competitors' cost advantages. No incumbent has strong motivation to imitate Nissan's current strategy.
Switching Costs: Low. Customers face minimal friction in switching between brands. Nissan's customer loyalty programs and dealer relationships provide modest retention benefits but nothing approaching true lock-in.
Branding: Damaged. Nissan's brand has weakened considerably. The GT-R and Z-car heritage provides enthusiasm among performance enthusiasts but doesn't translate to mainstream purchasing decisions. Infiniti has never achieved the prestige of Lexus.
Cornered Resource: Limited. Nissan lacks unique access to critical inputs, proprietary technology, or exceptional talent that competitors cannot replicate.
Process Power: Questionable. Whatever operational advantages Nissan developed under Ghosn appear to have dissipated. A GlobalData analysis underscores Nissan's excess capacity: factory utilization rates in 2024 were just 57.7% in the US, 45.3% in China, and 56.7% in Japan, far below the industry's 80% breakeven benchmark.
Key Performance Indicators to Track
For investors monitoring Nissan's recovery prospects, three KPIs deserve primary attention:
1. Operating Margin Trajectory Operating margin captures whether cost-cutting and pricing power are improving the fundamental economics of the business. Nissan's current 0.6% margin is nowhere near sustainable; the path toward 5%+ margins (industry average for profitable mass-market automakers) is essential. Watch quarterly progression, not annual targets.
2. U.S. and China Sales Mix by Powertrain These two markets represent Nissan's most important profit pools. Track the percentage of sales coming from hybrids, PHEVs, and BEVs versus traditional ICE vehicles. Nissan missed the hybrid wave; whether it can catch up will determine relevance in these markets.
3. Free Cash Flow Generation With significant debt obligations coming due, Nissan's ability to generate cash from operations is existential. The Re:Nissan plan targets substantial cost savings, but these must translate into positive free cash flow to provide runway for product investment and debt service.
Legal and Regulatory Considerations
Several material overhangs warrant investor attention:
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Ghosn-related litigation: Ghosn is fighting a ÂĄ15.5 billion ($102.5 million) civil claim leveled by Nissan in a Yokohama court. And Ghosn has filed suit against Nissan in a Lebanon court claiming $1 billion in damages and lost compensation.
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Emissions and safety regulations: Compliance with tightening emissions standards globally requires substantial investment in electrification, which Nissan can ill afford given its financial position.
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U.S. tariff uncertainty: "Given the uncertainty related to tariff environment, the guidance for operating profit, net income and auto-free cash flow for the fiscal year are currently to be determined," Nissan wrote.
X. Bull and Bear Cases
The Bull Case
Nissan has survived near-death experiences before. The company that emerged from the 1999 crisis under Ghosn was unrecognizable from the debt-laden enterprise that nearly collapsed. Could history repeat?
Restructuring momentum: The Re:Nissan plan represents decisive action. Consolidating from 17 to 10 plants will eliminate excess capacity. The 20,000 job cuts, while painful, align the cost structure with actual volumes.
Product pipeline: Nissan began to release details of the third-generation Leaf in March 2025. It was unveiled on 17 June 2025, with substantial updates to its design, platform, and performance. The model is expected to be released later that year. Departing from its previous hatchback form, the new Leaf will adopt a subcompact crossover-style body built on the AmpR Medium platform. Nissan has stated that the vehicle will offer "significant range improvements", with an estimated driving range of 490 km (303 miles) (EPA) on select configuration. A revitalized LEAF could reclaim some of the EV momentum squandered over the past decade.
Partnership optionality: Honda merger talks failed, but other doors may open. The Taiwanese maker of electronics, best known for being Apple's main supplier, has confirmed it is interested in speaking with Nissan about working together, its chairman, Young Liu, told reporters. Foxconn is not interested in acquiring the carmaker, he added. Technology partnerships could provide capital and capabilities Nissan lacks internally.
New leadership: Ivan Espinosa told reporters that the company's corporate culture is "lacking empathy" and has to change. Espinosa repeatedly came back to the importance of being nimble. New cars will be developed in 37 months, and offshoot models within 30 months. Fresh leadership with product planning expertise may instill the urgency and focus the organization needs.
Undervaluation: Nissan had a market cap of $8.42 billion at the time of writing, down from $38.87 billion in May 2018. If restructuring succeeds, the upside from current depressed valuations could be substantial.
The Bear Case
The challenges Nissan faces may simply be too severe to overcome within the available time and resources.
Cash runway constraints: "We have 12 or 14 months to survive," a senior official stated. Restructuring takes time. Nissan may not have enough runway to execute its turnaround before debt obligations come due.
Competitive position deteriorating: Every month that Nissan struggles, competitors advance. Toyota's hybrid dominance, Tesla's technology leadership, and Chinese cost advantages are widening, not narrowing. The window for Nissan to catch up may have already closed.
Management credibility: During the current financial year to end-March, Nissan has cut its profit forecast no fewer than three times. Repeated guidance cuts erode investor confidence. Espinosa has his work cut out for him as the maker of the Sentra sedan and Infiniti luxury cars faces yet another crisis, which began decades ago when Carlos Ghosn was sent in by French alliance partner Renault to save it from the brink of bankruptcy. This is the fourth CEO in eight years—leadership instability suggests governance problems that new appointments alone cannot solve.
Structural industry challenges: The automotive industry is consolidating rapidly. Players without scale, technology leadership, or cost advantages will be squeezed out. Nissan is subscale, technology-lagging, and high-cost relative to emerging Chinese competitors.
Alliance dissolution aftermath: At this point, the alliance is all but history. Without Renault partnership synergies, Nissan faces going-it-alone costs that may be prohibitive. The company lacks the purchasing power, R&D scale, and geographic diversity that the alliance once provided.
Brand erosion: Years of stagnant products and corporate turmoil have damaged the Nissan brand. Rebuilding brand equity takes years and substantial marketing investment—resources the company lacks.
XI. Conclusion: A Company at the Crossroads
Nissan's story encapsulates both the promise and perils of modern global business. A company founded on the vision of a Japanese entrepreneur who learned American manufacturing techniques, rebuilt from the ashes of war, conquered foreign markets with fuel-efficient vehicles, and pioneered mass-market electric cars now finds itself fighting for survival in an industry it helped create.
The Ghosn era demonstrated what cross-cultural leadership and disciplined execution could achieve. But it also revealed the fragility of structures built around individuals rather than institutions. When Ghosn was removed—whether through legitimate prosecution or corporate coup, the debate continues—no mechanism existed to maintain the trust and coordination that held the Renault-Nissan Alliance together.
The EV leadership squandered represents perhaps the most tragic element of the story. Nissan had everything required to dominate the electric future: proven technology, manufacturing scale, brand recognition as the EV pioneer, and a multi-year head start. The company allowed all of this to slip away through complacency and distraction.
It's 1999 again and though not really at risk of closing down, Nissan is facing very tough challenges. The new CEO will have to turn the company around from this financial situation.
For Ivan Espinosa, the challenge is immense. He must simultaneously cut costs, refresh the product lineup, rebuild brand credibility, and navigate an industry in profound transformation—all while managing billions in debt and a demoralized workforce.
The next 12 to 18 months will determine whether Nissan survives as an independent company, becomes a subsidiary of a larger player, or faces a more dire fate. The company's 90-year history provides both inspiration and warning: Nissan has shown it can rise from the ashes, but it has also demonstrated how quickly hard-won advantages can be squandered.
For investors, the situation demands careful monitoring of the KPIs outlined above—operating margins, powertrain mix in key markets, and free cash flow generation. The bull case requires believing that new leadership can execute a turnaround faster and more effectively than recent history suggests. The bear case recognizes that competitive dynamics, structural industry changes, and the company's own weakened position may simply be too much to overcome.
What is certain is that the next chapter of Nissan's story—whether one of recovery or decline—will be written quickly. The company that Yoshisuke Aikawa built, that survived world war and near-bankruptcy, that pioneered everything from the Z-car to the mass-market EV, now faces its final act.
The automobile industry rarely offers second chances. Nissan has already used one, in 1999. Whether it can conjure another remains the central question for every stakeholder—from the factory workers in Smyrna, Tennessee, to the shareholders in Tokyo, to the consumers weighing their next vehicle purchase. In an industry defined by forward motion, standing still is not an option.
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