Edited Transcript of 7201.T earnings conference call or presentation 28-May-20 8:00am GMT

Tokyo Jun 30, 2020 (Thomson StreetEvents) — Edited Transcript of Nissan Motor Co Ltd earnings conference call or presentation Thursday, May 28, 2020 at 8:00:00am GMT

Nissan Motor Co., Ltd. – Representative Executive Officer, Chief Performance Officer, COO & Director

Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director

Nissan Motor Co., Ltd. – Executive Officer & CFO

[Interpreted] Ladies and gentlemen, thank you for joining this session out of your tight schedule. We would like to begin the announcement of the results of the financials of the fiscal year 2019, as well as the business transformation plan. In Japan, because the state of the emergency has been lifted, however, in order to prevent the spread of the coronavirus infections, we would like to organize this session online. As for the people on the stage, in order to make the communication clear, people are not wearing the mask. But with regards to the organization within this venue, we are making sure that the infection’s spread are prevented.

Let me introduce you to the people who are here today. Representing Executive Officer and CEO, Makoto Uchida; Representing Executive Officer, COO, Mr. Ashwani Gupta; and Executive Officer, CFO, Mr. Stephen Ma.

Now I would like to ask CEO, Mr. Uchida, to talk about the results for the fiscal year 2019, as well as the business transformation plan. Uchida-san, the floor is yours.

Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [2]

[Interpreted] Yes. Thank you. Thank you for joining us today for the announcement of our fiscal year 2019 financial results and revised business transformation plan. Although the government has lifted the state of emergency here in Japan, we are holding the session via live webcast in order to prevent the spread of COVID-19 coronavirus. Around the world, COVID-19 has taken many lives. We would like to express our heartfelt sympathy to all the bereaved families and loved ones. In addition, we would like to express our sincere gratitude to all those working on the medical frontlines.

At Nissan, the safety of our communities, stakeholders and employees is always our highest priority, and we continue to implement proactive action. We continue to follow guidelines set by governments and organizations around the world, carrying out initiatives such as work at home programs and temporary business shutdowns in order to be of further assistance to the efforts to stop the spread. At various locations around the world, we are making face shields, medical gowns and providing vehicles.

COVID-19 has deeply impacted financial activities, with this impact also being felt in the automotive industry. Nissan also has its own issues that have combined with these external factors and worsened our financial results.

Today, following the presentation, our fiscal year 2019 financial results, I would also like to talk about our business recovery initiatives.

Let me talk about the sales performance of the fiscal year 2019. Turning to the sales results in fiscal year 2019, global total industry volume, or TIV, fell by 6.9% to 85.73 million units due to the slowdown in the China market and stagnation of global markets as a result of the outbreak from the COVID-19 pandemic in the fourth quarter. Nissan sales decreased 10.6% to 4,930,000 units given the significant slowdown in TIV in the fourth quarter, as well as the decrease in sales, primarily in North America and Europe in the first 3 quarters. The company’s sales outperformed the market in China, but market share decreased in other regions. Despite the decrease in sales, our global market share at 5.8% was in line with our projections we announced last February.

Let me move on to the headline financial results. These are the headline financial results for fiscal year 2019 based on the equity accounting method for our joint venture in China. Consolidated net revenues declined to JPY 9.879 trillion, resulting in an operating loss of JPY 40.5 billion and net loss of JPY 671.2 billion. These results reflect the decrease in sales volume, as explained earlier. Net loss also includes costs associated with restructuring and impairments of JPY 603 billion as we focus on restructuring measures to improve the company’s profitability.

Excluding these items, net loss for the fiscal year was JPY 68.2 billion. While free cash flow for the automotive business deteriorated to a negative JPY 641 billion, Nissan continues to maintain healthy levels of cash in the automotive business, and we ended the period with an automotive net cash position of JPY 1.065 trillion despite the crisis and resulting decline in performance.

The next slide is the income statement for the fiscal year. I would like to skip this.

The variance in operating profit against the outlook announced in February is primarily due to the impact of COVID-19, including the negative impact on volume mix by JPY 70 billion, decreasing part sales by JPY 20 billion and booking of provisions for the sales finance business by JPY 30 billion.

Regarding the operating profit variance compared to fiscal year 2018. As explained in previous quarters, external factors, including foreign exchange fluctuations, regulatory compliance expenses and product enrichment costs and rising commodity prices continue to pressure the automotive industry. The decrease in sales volume continues to weigh on our profit as we suffer from an aging product portfolio and limited profit contribution from our efforts to normalize sales.

R&D and manufacturing expenses increased JPY 55.9 billion for the year, mainly due to investments for the future. In fiscal year 2019, we incurred restructuring charges and impairments in business assets of JPY 603 billion as we transformed the business to improve profitability and achieve sustainable growth.

Regarding impairment of business assets, we booked a loss of JPY 522 billion due to excess production capacity based on future volume projections. This impairment is expected to generate a reduction in depreciation expense of approximately JPY 70 billion in fiscal year 2020. With regards to restructuring charges, we booked provisions for expected expenditures in relation to restructuring items that the company decided on in fiscal year 2019. I will explain the details of the restructuring measures later in the presentation.

Now I would like to comment on the liquidity required to run the business. Although the situation surrounding COVID-19 is improving, we expect it will take more time until this pandemic ends, along with the full recovery of the economy. We remain focused on our liquidity position. Nissan continues to have healthy levels of cash for the automotive business, and we have sufficient funding available to meet our cash needs during this crisis. At year-end, cash on hand for the automotive business totaled JPY 1.495 trillion and automotive net cash was JPY 1.065 trillion. In addition, the company continues to have access to approximately JPY 1.3 trillion in credit lines, which remain unused. Furthermore, in response to the COVID-19 pandemic, we raised an additional JPY 712.6 billion in funding this April and May.

Led by top management, Nissan also launched cash management and profitability improvement programs, including adjusting production plans to reflect market and supply situations timely, inventory control, expense reductions and optimization of capital expenditures and new model launches to the extent it does not inhibit future growth. We will continue to implement additional measures as required based on market conditions.

For fiscal year 2020, we currently estimate global TIV to decline by approximately 15% to 20% from the prior year due to COVID-19 pandemic. However, uncertainty remains. While we continue to evaluate the impact of the pandemic on our business and operations, given this uncertainty, it is difficult to reasonably forecast an outlook for fiscal year 2020 at this time. We will issue the fiscal year 2020 forecast as soon as we are able to reasonably calculate an outlook for the fiscal year.

That concludes the fiscal year 2019 financial results. It is my privilege to have the opportunity to introduce to you our revised plan.

Let me do some review or look back. When this company announced the Nissan Power 88 midterm plan exactly 9 years ago, the plan was based on expectations of growing demand, as well as a need for increased production capacity outside Japan with a focus on emerging markets. In line with this, we pursued a strategy of expansion. Although we sow the seeds of the plans, we were not able to grow them effectively. As a result, Nissan was unable to harvest. In addition, due to the massive investments made around the world, Nissan wasn’t able to launch new products in key markets, particularly in Japan. About 2 years ago, we started shifting away from this expansion strategy. However, we have been left with a situation where we have global production capacity of around 7 million units, but annual sales of around 5 million units. To continue our business and generate a profit under these conditions has been extremely difficult.

For Nissan to overcome this situation, we must admit our mistakes and correct course. We must resolve the issue of redundant assets from which we do not expect sufficient returns. We must, therefore, prioritize and focus by allocating resources to core markets and core segments. These are very difficult decisions, but these steps need to be taken decisively and without compromise. Therefore, the key focus of our plan is to ensure steady growth instead of pursuing excessive sales expansion, concentrate on core competencies, while enhancing the quality of our business alongside financial discipline, restore a culture defined by Nissan-ness for the new era. By focusing on these areas, we aim to build a business foundation by the end of fiscal year 2023 that is robust enough to compete effectively for the next decade. That is why we call it Nissan Next. This is our main mission.

Nissan will focus on 2 key areas. The first is rationalizing the businesses. In this area, we are reorganizing operations from which we do not expect sufficient returns and we are reducing excess production capacity. Specifically, we are optimizing our production capacity, rationalizing our global product lineup and, through our efforts to optimize other expenses, we will significantly reduce fixed cost.

The second area is prioritization and focus. Here, with robust management, we will make ample investments to deliver a solid recovery and steady growth in the identified core areas. Essential to support these 2 reforms will be an emphasis on quality and customer needs and of course, our valued suppliers, dealers and business partners.

Let me now provide more details on how we are going to make this business transformation a reality. The reductions or the — rightsizing the production capacity, the reductions we are making in production represent a 20% cut globally in the 7.2 million units capacity that we have in 2018. We will move to 5.4 million unit production footprint under normal production units. In addition, in certain markets, we plan to improve production efficiency by consolidated models.

In Indonesia, we will close our production plan, making Thailand our production base in ASEAN. In Western Europe, we will maintain production of core models at our U.K. plant in Sunderland and improve efficiency. We considered various measures for the Barcelona plant. And although a very difficult decision, we intend to close the plant, and we will begin discussions and preparations.

At our North American production plants, we are consolidating models by segment and platform to improve efficiency. These initiatives, combined with further rationalization, will enable us to maintain a global plant utilization ratio above 80%, making our operations significantly more profitable than in the past.

In times of increased demand, we aim to have the flexibility to increase capacity to close to 6 million units annually. As we rightsize our production capacity, we are also investing in intelligent plants that will enable reforms in working styles and flexible production. Nissan is also adapting its reduction practices to changing business needs through methods such as reducing raw material and other costs.

On the product side, we are streamlining our portfolio down to core models. By the end of fiscal year 2023, we will discontinue older cars and trucks, as well as models unique to a single region, and withdrawing the Datsun brand in Russia, reduce the number of models in our portfolio from 69 to less than 55. This represents a reduction of approximately 20% for fiscal year 2018 levels, and will enhance our product competitiveness. To do this, we will focus on model segments with global appeal that have demonstrated competitive strength, those include the CED segments, electric vehicles and sports cars. We will be introducing advanced technologies into these segments, developing products with greater value and competitiveness. Also, we will lower the average age of models, bringing it to 4 years or less.

Outside these focus segments, we will work with our Alliance partners, Renault and Mitsubishi Motors, to share their assets, including products and technologies. We are reducing fixed costs and other expenses by 15% to adjust them to the size of the business. We are reducing fixed costs by approximately JPY 300 billion, and we’ll work to maintain that cost base going forward.

What we are reducing is excess facilities and products from which we expect low future return. While for the areas in which we will focus, we will continue to robustly invest for steady growth.

Now let’s look at our work to prioritize and focus in 3 areas: markets, products and technology. Let’s look at our approach to markets. Nissan will focus on Japan, China and North America, including Mexico, as our core markets, where we will concentrate resources and ensure healthy business operations. In South America, ASEAN and Europe, we will maximize the use of Alliance assets, while developing businesses at an appropriate size as these markets grow. In these regions, and also the Middle East, we will concentrate our management resources on markets where Nissan has growth potential. And we will withdraw from South Korea, where we see limited opportunities, and we will reduce the size of our operations in some ASEAN markets. In line with the new business footprint, we will revise our management structure in the region to increase efficiency. Although we are unable to provide details at this point in time, Nissan will systematically rightsize operations or exit some other markets as we prioritize and focus.

Japan is Nissan’s home market, and we are refocusing accordingly. We have a strong foundation here in Japan. Since 1999, Nissan prioritized activities outside Japan, which created gaps in Japan in new model and technology launches and disappointed our loyal customers. We will not offer products just to showcase technologies. Instead, we are enriching our product offerings by packaging advanced technologies of practical value that are accessible to a greater number of customers.

Our EV and driver support technologies, in particular, or electrified vehicles, have been well received by a lot of customers in Japan for their practicality and new value. By the end of year 2023, we will expand our electrified lineup, launching 2 more electric vehicles and 4 more e-POWER vehicles, resulting in an electrification of 60% of our sales. In Japan, more than 90% of our customers appreciate our e-POWER and ProPILOT technologies. By focusing on our electrification and autonomous driving technologies, we aim to build greater brand value and regain market share.

In China, we will continue our healthy business operations. However, we do see challenges, including the impact of the COVID-19 coronavirus pandemic, as well as slowing market growth and more stringent environmental regulations. China is the world’s largest auto market where we have established a strong presence. We will continue to follow our plan of ensuring steady growth without using incentives to secure volume and market share. Our assessment is that people in China are optimistic about further growth and prosperity. They also embrace new technologies, including IT and EVs. So Nissan expects to continue enjoying steady growth due to our strength in advanced technologies.

As part of our Nissan Intelligent Mobility strategy, in addition to having 7 EVs in our lineup, we will launch our e-POWER technology in core products. Connectivity will be key. We will further increase the uptake from 75% today to close to 90% by the end of the fiscal year 2023, resulting in 6 million connected vehicles in operation. This will not only increase customer convenience, but it will also help us develop better products and services, thanks to the data we can obtain from these connected cars.

In the United States, over the past 2 years, Nissan has shifted its focus from fleet sales to pure retail and has been working to normalize sales. Although we are making efforts to improve net revenue per unit and to control incentives, it is taking significantly more time than initially expected. We are discovering the difficulty of restoring a brand that has been damaged. We are now rationalizing further, including reducing fixed costs in line with the actual speed of recovery and the revision of the product plan. As I have stated before, we expect to see true recovery in the United States after we focus on sales normalization and start introducing new technologies and products, thereby gradually improving our performance.

On top of the results we are starting to see from the launch of the new Sentra last year, this year, we will launch the new Rogue, which will be a key driver. We also have a series of enhancements planned for our SUVs and pickups. These include new Pathfinder, a new QX60 and a new Frontier truck. Throughout this process, we will also reengage and closely support our dealers and suppliers to improve our business model.

Europe remains an important region for Nissan, with a long history and important assets. At this time, Europe’s automotive industry is in a period of transition. There is tougher competition and more stringent regulations, particularly in the environmental area, which is a challenge for us. For us to continue our business in this tough market, we must enhance the measures we have been taking. To this end — to do this, as announced yesterday by the Alliance, we will be pursuing the leader-follower format to utilize the supply of some vehicles and technologies, while focusing on Crossover SUVS, as part of our electrification drive, we will be adding an all-electric SUV to the lineup and expanding our e-POWER offerings, all aimed to maintain market share.

In Latin — next is about continuous investments for the future and more use of the Alliance. We would like to leverage Alliance assets, while maintaining our product lineup and improve the efficiency of our investments and to develop the business. In Latin America, we have significant brand trends. In markets that have potential for future growth, we will continue to invest in an appropriately sized business and for the future. And we will also leverage Alliance assets. And while maintaining our product lineup, we plan to improve the efficiency of our investments and to develop the business as a pillar for the future of our company.

Earlier, I talked about rationalizing our product portfolio and concentrating our resources on core models. We are starting with at least 12 new vehicles in the next 18 months, including premium brand Infiniti models. Here’s a glimpse of what’s coming within the year.

In mid-June, we will be introducing an all-new version of the Rogue, Nissan’s best-selling vehicle in the United States. Also in June, we will be introducing the Kicks to Japan, a nameplate that’s been successful around the world due to its youthful styling and practical technology. It will feature a full e-POWER drivetrain, further strengthening our best-selling e-POWER lineup that includes the Note and the Serena. The Kicks will further enhance our presence in this market.

In July, we will review the production model of our EV crossover called Ariya, shown as a concept at the 2019 Tokyo Motor Show. And the Ariya has cutting-edge styling inside and out, high-technology content, including ProPILOT 2.0, a choice of powertrains and much more. We expect the Ariya to play a key role as a brand driver and the face of Nissan for the new era.

In the Ariya, the technology highlight is the fusion of electrification and advanced driver support technology, which links to the future autonomous driving. Global sales of the Nissan LEAF, which we launched in 2010 as the world’s first mass production 100% EV have exceeded 470,000 units. By the end of fiscal year 2023, we are on track to launch more than 8 100% EVs.

Another pillar of our electrification strategy is e-POWER, of which cumulative sales have surpassed 390,000 units. We plan to expand our e-POWER offerings globally into the B and C segments. By the end of fiscal year 2023, we forecast electrified vehicles to account for 60% of our sales in Japan, 23% in China and 50% in Europe, resulting in sales of more than 1 million units. Nissan is also a leader on autonomous driving in terms of its practicality and product application with an established track record. The Nissan Skyline is equipped with ProPILOT 2.0, which is the world’s first advanced driver system with a hands-off function. As of March this year, we have sold more than 660,000 vehicles equipped with our ProPILOT and assisted driving features. Our autonomous drive system will be introduced in more than 20 models in 20 markets by the end of fiscal year 2023. We are forecasting more than 1.5 million ProPILOT equipped vehicle sales per year by the end of fiscal year 2023. The know-how we accumulate from markets around the world will be the link to future autonomous driving technologies.

Over the last few months, people all around the world have been forced to undergo changes to their lives. At Nissan, this has again brought home to us that our long-term mission is to enrich people’s lives through mobility and to bring vitality to society.

For the next 10 years, the key drivers will be electric vehicles, with which we have been ahead of the market and driver support technologies. For new technologies to bring vitality to society, we will need to do what hasn’t been done before. Last year, soon after the powerful typhoon hit Japan and cut power for many residents, we sent dozens of Nissan LEAF vehicles to help provide electricity. And in Yokohama, we have been carrying out Easy Ride field tests for 3 years, which represent our efforts in the areas of new mobility based on autonomous drive technologies. With the fusion of our electric vehicles and autonomous drive initiatives, we believe we can create a society in which all have freedom of mobility.

That is the outline of our plan to achieve steady performance recovery through prioritization and focus. By implementing all of these actions and under certain economic and market conditions, Nissan aims to complete its strategy in the following 2 years, and return automotive free cash flow to a healthy level. By the end of fiscal year 2023, we aim for our global market share to reach 6%, and our core operating margin to increase to 5%, based on the equity method accounting basis, which includes a proportionate share of our Chinese joint venture. We are resolved to take all the steps necessary without any compromise to rebuild a solid foundation that enables Nissan to effectively compete for the next decade.

With regards to free cash flow, we have a significant KPI set for us. And depending on the situation of COVID-19, and the situation may change, but by the fiscal — in the second half of the fiscal year 2021, we intend to bring the free cash flow to a positive level. That is one of the important indicators that we are pursuing.

To finish, let me share some thoughts or resolution that I have in mind. Let me reemphasize, I will make every effort to return Nissan to a growth path. Since I became CEO last December, I have been sending the message both inside and outside the company that Nissan has much greater potential than what we see today. Nissan has great assets and qualities, including talented employees, global business experience, persistence and tenacity to accomplish, and we have learned from past mistakes. These are all our great assets. We must admit failures and take corrective actions. Top management must be the first to break an inward looking culture and regain the trust of our customers, dealers and business partners. This will not happen by merely revising our Code of Conduct or processes. So I am committed to doing everything necessary to drive everyone in this organization to change Nissan for a consistent outcome. This concludes my presentation. Thank you for your kind attention.

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Questions and Answers

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Unidentified Company Representative, [1]

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[Interpreted] Okay. We would like to start the Q&A session now. (Operator Instructions) Yes, Yomiuri Shimbun, [Mukoyama-san], thank you for your question. So we are going to switch over to your screen. So when you see your face, please ask your question. Could you switch on your microphone, because we don’t hear you?

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Unidentified Analyst, [2]

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[Interpreted] Do you hear me?

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Unidentified Company Representative, [3]

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[Interpreted] Please ask your question, sir.

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Unidentified Analyst, [4]

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[Interpreted] Yes, Uchida-san, I have a couple of questions. The first one, this revised MTP, what’s the approach that you took to revise the MTP? What’s the difference with this revised MTP with the past MTPs? And the second question, as a result of deteriorated performance, you are booking a loss, which is even larger than that of the Lehman crisis. How are you going to take a responsibility as the top management?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [5]

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[Interpreted] Thank you for your question, sir. Okay, starting with the first question. Since 2 years ago, we have been shifting away from the expansion strategy. And looking at the short-term performance, 7 million units of capacity against us, our sales results were at 5 million units, and we found that it is extremely difficult to continue in the business and generate a profit in this setup. Therefore, we decided to admit failures and correct our course, and reorganize the excess facilities that do not — where we do not expect sufficient returns and prioritize and focus on the core markets and core segments where we continuously invest. And this is the approach. And this MTP, what’s the difference in this revised plan? Based on the lessons learned, excessive sales push or expansion is not what we are going to pursue. While we focus on profit and ensure steady growth, focus on core competence, enhance the quality of business and financial discipline, while we restore Nissan-ness. These are the — this is what we are going to realize in this revised plan. And the second question. Our results for the fiscal year ’19, an impairment loss, we are booking big losses, and we take this very seriously as top management with regards to this result. First, shareholders and the people who are affected by COVID-19 and undergoing the shutdown, in order to share the pain, with the approval of Compensation Committee, we are taking the following actions. Based on the results of fiscal year 2019, the variable compensation will be largely reduced. In addition to this, variable compensation. For me, CEO and COO, we will return the entire amount of variable compassion. Other EC members will be returning voluntarily basis. And for the fiscal year, the ABS, basic salary for the fiscal year 2020, does — the salary increase for the — April has been delayed by at least 6 months, including the management. And because of the impact of COVID-19 and as we carry out the business transformation plan, there are painful efforts that we will expect to undergo. So in order to share this pain, our basic salary, CEO’s basic salary, in the first half of the year, we are going to make the following reduction. It’s 50% reduction for me, CEO, COO and other Executive Officers will get the reduction of 30%. And for the rest of the corporate offices, will get 20% of reduction in basic salary. As a result, top management will be united to carry out the plan. That’s our commitment and resolution.

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Unidentified Company Representative, [6]

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[Interpreted] Okay. Moving on to the next question. Financial Times, (inaudible), it’s your turn. Sorry, are you on mute? Can you unmute your microphone? We can’t hear your voice. Please turn on your microphone. Unmute the microphone. Still not audible. Still cannot hear your voice. Your voice is inaudible. I think — can you hear? Can you hear? I think your Japanese was on an English channel. Now we can hear you.

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Unidentified Analyst, [7]

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[Interpreted] Yes. Can you hear me?

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Unidentified Company Representative, [8]

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[Interpreted] Please proceed to your question.

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Unidentified Analyst, [9]

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[Interpreted] Thank you. Thank you very much. This time range, profitability and financial basis have to be augmented and strengthened, I think that is your priority in this plan. When it comes to the branding as well as the competitiveness of the new products. It’s an essential recovery of the performance. Related to these points, I have a question to Mr. Uchida about his thought. This time, JPY 300 billion fixed cost reduction by fiscal 2020. But wouldn’t you need any additional measures? And 1 more point, sorry. For the time being, funding is not a problem, you said. But if demand sluggishness continues, for example, the government of Japan is preparing certain programs like a JPY 12 trillion worth of program for the corporation’s support measures, are you thinking of the option of utilizing that government program? So can you talk about it?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [10]

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[Interpreted] Thank you very much. First, regarding the second point, regarding the JPY 300 billion, wouldn’t there be any additional measures? Of course, we have revised the plan now. Our capacity to produce, as well as our financial body’s strengths has to be strengthened. So where we can control fixed costs, and that is the domain, that is where we are challenging in a very substantial way to reduce. In this context, of course, I think it is shown in the slide. Can you go to the table, the table on the fixed cost reduction? Well, what I want to emphasize is this, beyond what we plan, as necessary, we will optimize the reduction of the fixed cost. Having done so, we will capitalize on our strengths. We will grow our business. So investing in core business. That is what we will pursue as you can see on the screen. In other words, what we envisage now, well, 5 million-plus of our business scale or scale of business becomes a reality, we have to have the financial basis, which will produce a healthy and sound profitability. But this time, it’s not that restructuring is the main stay. We want to strengthen the financial base of our company. And at the same time, we have to connect our efforts to the future growth. In order to do that in the immediate surrounding, we will need further development. And for the development of products, we will have to continuously make investment. So with these viewpoints, we have revised the plan. Did I answer your question regarding the second part of your question? Now turning to your third question, a third point, that is JPY 12 trillion in government program. For the time being, bearing in mind the corona situation, we have good liquidity in terms of cash. I told you the number about that. So of course, going forward, depending upon the situation of the pandemic, after April, we know that it’s going to improve. So we are prepared, and we do a lot of simulation. In this context, we will control our cash out to the extent possible. So to the model lineup, we will have to do that. I explained about it in my presentation. So as such, we want to ensure the soundness of our business. That is my answer to the second part of your situation. So I’d like to ask our CFO to make some additional comments regarding details.

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Stephen Ma, Nissan Motor Co., Ltd. – Executive Officer & CFO [11]

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[Interpreted] The question, as I mentioned earlier in the presentation, we have, just on the auto side, JPY 1.5 trillion of cash, and net cash is almost JPY 1.1 trillion, plus we had additional liquidity. Actually, combined auto and sales finance, we had a total of JPY 3 trillion liquidity available. On top of that, we have now secured additional, I believe, more than JPY 700 billion of additional loans in April and May. So right now, we are foreseeing we have plenty of liquidity, at least for these few months. And then as things progress, we will look at all the possible option and be open to pursue any other avenues.

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [12]

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[Interpreted] Going back to the first question, just to check the first question, JPY 300 billion of fixed cost reduction, is there any additional measures required the fixed cost reduction? I think that was the first question. With regards to the first question, as I said, further efficiency enhancement. Looking at the circumstances, we will take actions as necessary depending on the circumstance. The first one was about brand, right?

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Unidentified Analyst, [13]

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[Interpreted] Yes, restoring brand, regaining trust. Do you have confidence to make it happen?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [14]

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[Interpreted] Since I assumed CEO office, I have been saying this: Nissan’s potential power of each individual is not yet demonstrated if you look at the recent results. So by carrying out this plan, and enhance the brand value, am I confident to make this happen? Yes, I am. And for example, in compiling the budget, we didn’t start from volume. Rather, we looked at costs in line with the reality and how to enhance the brand and profitability based on our brand, our models and look for opportunities of the sales in new models. This is how we are devising a plan. And based on these elements, by fiscal year 2023, we would like to generate 5% of profit margin. Therefore, what I mean is that the contents of this plan has been well discussed and thoroughly discussed with the relevant members. So I am confident to make it happen, and I’m sure we can enhance the brand value of Nissan, bring out the potential of Nissan.

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Unidentified Company Representative, [15]

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[Interpreted] moving on to the question, the next one is Wall Street Journal, Sean McLain-san.

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Sean McLain;Wall Street Journal;Reporter, [16]

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Sean McLain from the Wall Street Journal. Two questions, either Mr. Gupta or Mr. Uchida, I think, can answer this one. First, can you share any more details about the recovery plan in the U.S.? It seems the presentation was a little scant on details. Could you share whatever production changes you’re doing, anything you’re changing to the organization there that could tell us what’s going to happen there? And secondly, is there any more clarity you can give on the cuts to the model lineup? You mentioned that things that are only sold in 1 market are going to get cut. Is that an absolute rule? I guess the question is, for example, do you need a Nissan Maxima and a Merano anymore?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [17]

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Well the question, maybe I would start with the U.S. the overall, then I think the, Ashwani could follow-on the detail. So U.S., we would like to repeat that the direction of our strategy is right. We need to make the quality of the sales to be much better. However, knowing the current situation of the coronavirus impact, it will take a time. But I think the direction what we are taking is right, and we will continue to do so. And as we mentioned, starting with the Sentra, we started to foresee our Nissan brand value, which is showing that right direction that we are taking. And second, we will have a role to be introduced soon. In terms about retail sales share is increasing as planned, and all this combination of the strategy to make the U.S. are basic, and we would like to further to reach that to the recovery. So these are the overall of the U.S. strategy. And I think that’s when you could further to elaborate how we are doing from the operational point of view.

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Ashwani Gupta, Nissan Motor Co., Ltd. – Representative Executive Officer, Chief Performance Officer, COO & Director [18]

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Thank you, Sean, for the question. Obviously, U.S. is a very important market for us. When we set up our strategy for — based on priority and focus, obviously, we selected U.S., Japan and China because these are the 3 markets where the top 3 markets exist; #2, we have a respectable market share; and #3 is these are the markets where we should bring the profitable growth. Now looking at the United States, I would say, very concretely, we have 5 things which we are going to work on and which we have already started working on. The first one is the product strategy. On the product strategy, at first we are going to launch 8 new models in next 28 months. That will bring down our average age of product from above 5 years to close to 3 years. These new products will be with the latest technology of Nissan, for example, on Sentra, we launched and it is seen as a high-performance sedan, fitted with driver assist technology, but also one of the most connected car in the United States. It will be followed by Rogue, which will be, again, 1 of the best connected car in the United States, with features like wireless Apple Car Play. Based on these product lineup, the second thing comes, our dealer engagement because dealers are the ones who are in front of customers and they are face of ours in front of customer. That’s why the dealer engagement is very important. To have the dealer confidence and engagement in February, we already launched Nissan Comprehensive 2020 plan, which talks about the dealer health, and we are going to continue this plan to sustainably grow, focusing on return on sales for the dealers. The third thing is on the brand power, and U.S. is the country where we believe Nissan is still not there where Nissan should be, which means brand is not driving the product, but product is driving the brand. And here, we would like to use the new product and new technology to establish our brand. In line with that, we have already set up the foundation. #1, we are CSI #3, we are SSI #4. In terms of IQS, we are the best Japanese brand in model year ’19. Then seen from the consumer, 7 of our products are already consumer recommended. And finally, regarding the dealer engagement, we have the top most score on the reputation. The fourth one is same as our global capacities. We will align our fixed cost in United States, and we will focus Smyrna on DSUV and CSUV, whereas we will focus Canton on frame and the C sedan. That rightsizing will give us a production utilization of more than 90% in United States. And finally, which is the fifth one, is about the organization. From 15th of June, we have the new leadership team in place. But in addition to that, we will establish a subsidiary Board in Nissan North America to oversee the region and brings all the focus and attention to this region for the recovery and the growth ahead. Thank you.

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Unidentified Company Representative, [19]

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[Interpreted] Okay, moving on to the next question, please. (inaudible) please.

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Unidentified Analyst, [20]

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[Interpreted] I have 2 questions to Mr. Uchida. First question: regarding the current situation, because of the COVID-19 in all business areas, cash is prepared, I am sure. Regarding Nissan, you explained the cash position. Don’t you have any worry? Can you frankly talk about it? And cash flow is in the negative domain. When and how are you going to return it to black figure? Now dividend, which is the return to shareholders, when are you going to restore it, at what level, by what time? Second question. Relationship with Renault. That is my second question. Yesterday, Nissan, Renault, Mitsubishi Alliance strengthening measures were announced yesterday. Since past, regarding relationship with Renault, Nissan is forced to take a disadvantaged position, according to some reports. Now with this strengthening alliance, do you think that it will contribute to improving the relationship between Nissan and Renault? These are the 2 questions.

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [21]

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[Interpreted] First question, the first question you asked. We will continue to maintain the cash liquidity and automotive funding is in a healthy state, and we have an ample amount of cash to prepare for any risks. As I mentioned, the cash position is JPY 1.4 trillion. And for the net cash, it’s JPY 1.06 trillion. And still, we have unused commitment line at the tune of JPY 1.3 trillion. And because of the COVID-19, JPY 700 billion or more funding is actually executed. So in these measures, we believe that regarding the funds that we believe necessary have been insured, and we will manage those funds, and we will maintain that cash position, although the situation is still difficult. So as of now, the immediate surroundings, we believe that we ensure enough amount of cash. Now in what time frame can we improve the cash flow position? Cash flow position improvement is the largest challenge for us. As I said, predicating upon the — with the corona situation, looking into the envisioned line by the second half of fiscal 2021, we would like to turn free cash flow into the positive domain. We have already run the simulation to that end. In terms of dividend, concrete recovery of dividend, the time line thereof, as of now, I’m not in a situation to be able to speak about it. But free cash flow will turn to positive. That is prioritized. And by doing so, we would like to return the dividends to the shareholders as soon as possible. Now turning to your second question, relationship with Renault. Since I assumed the current post of CEO, my opinion has not changed. My wording has not changed. I will repeat it again. Chairman Senard of our Alliance, and Masuko-san and now myself, we have the good amount of discussion about it. Alliance is able to contribute to member companies. I think that is the most important question. Competitiveness is the basis of that. Companies are difficult in a dire situation. Each member will have to have their own brands geared to growth. And there are some areas that companies are not so good at. And then in such areas that we can capitalize upon the ability of the Alliance member companies, that is the concept of the leader-follower scheme. Some people say that relationship is turning into difficult ones because of this. No, it’s quite the opposite. Because we are in an emergency situation, we can leverage the power of our Alliance, thereby the member companies can return to the growth path again where we are completely agreed on this. And yesterday, it led into the announcement of yesterday. So going forward, we will implement in concrete terms so that we will connect it to Nissan’s growth. I have not changed from that position. And in other member companies of our Alliance, they completely share this thinking. That is my understanding. And with that understanding, we are proceeding with the discussion of Alliance.

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Unidentified Company Representative, [22]

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[Interpreted] Moving on to the next question. Global Times, [Shen Gaosan].

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Unidentified Analyst, [23]

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This is (inaudible) from China. My question is, Chinese market is more like about components, according to the update. How fast Nissan will show stable growth in China?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [24]

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I will start at the initial, then probably Ashwani, as operationally, can add the comment. So China, China is one of the strong region that we have. We would like to sustainably make it grow, even that China has been hugely hit by the coronavirus. But if you look into the past few months, only the single month was being damaged was last March sales. From April, year-on-year, as far as the Nissan’s operation is concerned, we were positive sales in April. And probably, this recovery trend would continue into May. So fundamentally, China has a very strong brand and our network and our presence. So the point is how we can keep on, continue to, our strengths to be further to enhance. And from that point of view, we are not worried. But of course, looking at the future, we need to go 1 step more in terms of the China. So this is an area that we are further discussing with the China members, and we can come back when we talk about beyond 2023, what will be our picture in China. But up until 2023, we believe the current China operation would steadily to continue. Maybe Aswani, if you would like to add on to China.

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Ashwani Gupta, Nissan Motor Co., Ltd. – Representative Executive Officer, Chief Performance Officer, COO & Director [25]

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Thank you, Uchida-san. Thank you for the question. So before I go into how we are going to do it, let’s look at what is our strength in China as Nissan: At first, we have a very strong brand. We have strong products; #2, we have a very strong local joint venture team; and #3, our dealer’s engagement and confidence. Now let’s see how China automotive world is evolving. At first, obviously, we do not see the double-digit growth, which we used to see for the last 2 decades, which means that 2 things will happen — have already started happening. The one is, the first-time car buyers are increasing, but on the other side, the second-time car buyers will evolve more fastly because this is how the automotive market in China is getting matured, which means the things which we have to do as Nissan is to focus on, of course, the first-time car buyers, but also to bring in the products and technologies, which will help the first-time car buyers to upgrade themselves to the second-time car buyer. And this evolution means that we need to be more attractive and more differentiated with respect to our competitors. And for that, #1, we have already started working on China-specific products, which may not be global, but very much tailor-made to China for the Chinese customer. But these products will be highly curbed by the Nissan technology in terms of e-POWER, in terms of driverless, so which means the latest autonomous driving and the latest electrification technologies will be available for the Chinese market. Hence, we believe that, today, we have roughly 11% market share, and we are targeting roughly 12.5% market share, with a product age of less than 3.5 years. So putting it together, we do believe that we are getting ready to the evolution, which we are seeing in China, where customer is asking more in terms of entertainment, in terms of safety, in terms of comfort, and this is where we need to deliver our product and technology.

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Unidentified Company Representative, [26]

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[Interpreted] Moving on to the next question. TVS (inaudible)

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Unidentified Analyst, [27]

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[Interpreted] First question, reducing the manpower. Last summer, by fiscal 2022, there will be a reduction of, to the tune of 12,500. But because of the Indonesian plant closure and so forth, what will be the total scale of the reduction? And you will be resolutely implementing without any exceptions? You have not talked about the Japanese facilities. What about the Japanese plants? Second question, what is the Nissan’s strength that you think, as of now, looking into the future, what is the image of Nissan that you would like to develop in your mind?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [28]

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[Interpreted] First is the manned headcount reduction. 12,500, that’s the number that we announced already. Now this time, we are not placing restructuring as the main position. The capacity of production is going to be reduced. That’s why we said that. And going forward, we will need a specific and individual negotiations. So with the structural reform this time, the headcount reduction is not the main point why I refrain from talking anything specific about that. In good sincerity, we will have to discuss and consult with people of the unions, and as well as other stakeholders. But as I say many times, restructuring is not the emphasis. We have some lax asset. We do something about the assets that we don’t use. We have some strengths. For example, new Japanese intelligent car. We need a new production system. We need investment in that. We will do that. So regarding them, in stages, at a good timing, we will be making an announcement, and we will be explaining to you. Second question, what is the strength of Nissan? That’s your question. More than anything, the excellent workforce. That is the human resources. To our customers, EVs, autonomous driving, new values are always proposed. To that, we will make challenge, and we will seek breakthroughs. That is Nissan’s DNA and Nissan’s strength. Nissan always has manpower in the center. And we have always carried out human-centric activities. We would like to provide products and service for the people. Now what is the image of Nissan that I have? Nissan has to be a company with Nissan-ness, people were at the center. And for the people, we have provided the technology and services. The electric car is not only the technology. Product and technology is for the people. It’s fun. It’s pleasure. Be it in e-POWER or a new area, it’s the same thing. Autonomous driving technology is, therefore, the people’s use. So the new people’s lifestyle will change drastically. The automotive industry is in a very drastic position of changing. People are the center of focus. And for the sake of people, we will continue to make challenge as a company. This is the image of company that I would like to drive Nissan to in the future. In this way, I would like to make this company which will provide services and products to the customers.

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Unidentified Company Representative, [29]

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[Interpreted] Nikkan Kogyo Shimbun, [Kosaka-san]

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Unidentified Analyst, [30]

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Nikkan Kogyo, [Kosaka] is speaking. I have 2 questions. Starting with the first one, Nissan’s sales slowdown as well as because of the COVID-19, suppliers are in difficulties, too. For automakers, relationship with supplier will be very important. Compared to other carmakers, your reputation among suppliers are poor. So how are you going to approach the suppliers’ relations? You said that you value business partnership. So how do you see it? And the second point, Southeast Asia, you have a collaboration with Mitsubishi Motors, how are you going to enhance the partnership with Mitsubishi Motors in Southeast Asia? You — Indonesia plant, in Indonesia, Nissan cars are produced by Mitsubishi Motors. How are you going to expand this collaboration?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [31]

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[Interpreted] Yes, thank you for your question. Starting with the second one. Southeast Asia here, I would like to ask Ashwani-san, who is running the operation. But before that, starting with the first question. Business partners, dealers, suppliers, we will need to enhance the partnerships to make this revised plan and transformation plan reality. There’s no change in this focus. And this is my reflection. In the past, Nissan tend to pursue volume. And based on the volume that we pursued, we put RFQ, requests for quotation. In this process, we anticipated risk in the volume down risk. We included down risk on volume and place orders to the suppliers. This was how we approached them. But because when we fell short of the volume target, suppliers had to make investments in advance based on the bigger volume and there was issues in getting a return. So in terms of relations with suppliers, we have been setting aggressive volume, and this is a lesson learned from the past. And going forward, whether it’s our business or the volume that is challengeable, based on the challengeable volume of business, we would like to place orders to the suppliers. And more importantly, automotive business, or auto industry, is largely changing. And definitely, in the area of technology, we cannot just place orders to the suppliers, as we have done in the past. It’s time to revise this. Here, we are already talking to major suppliers, get their feedback and make improvements accordingly. And that’s what we are starting to do. Okay. Second question, collaboration with Mitsubishi in Southeast Asia, go ahead, please.

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Ashwani Gupta, Nissan Motor Co., Ltd. – Representative Executive Officer, Chief Performance Officer, COO & Director [32]

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Thank you. So before going into your answer, let me first share with you what is our Asia strategy for Nissan, and this is exactly in line with prioritization and focus. When we talk about prioritization and focus, for sure, Asia is a great market for us in terms of customers, in terms of products, but also in terms of partners, which we have in this region. However, when we look at our capability and capacity to cater to the demand of this region, we do believe that we need a partner who is much stronger than us in this region. And this is the reason, we selected this region to strengthen more with Mitsubishi. As far as Nissan is concerned, we are going to use Thailand plant for Asia, ASEAN, and — but also, we will use this plant for the export to the other parts of the world. For example, the Kicks e-POWER, which we just launched, will be also available in Japan from Thailand, which means Thailand will be catering more as an export hub, but also for Asia. So this is what about Thailand. Our second biggest market in Asia is Philippines, where we enjoy great market share on the frame-based SUV and the frame-based pickups. And here, we don’t have the plan today, and we are now studying with Mitsubishi to utilize the Mitsubishi plant in Philippines, so that we can localize our great products in the Philippines. So this is more about the utilization of Mitsubishi plant in Philippines. The third region, the third country, which is Indonesia, and as we said before, that because of our change in the strategy, we will stop our plant. However, we have more than 300,000 customers who own Nissan, and we have a great partner in Indonesia in the mobile. So we would like to continue the Nissan brand in Indonesia with a focus on SUV and MPV. And for SUV, we will launch Kicks e-POWER, which means we need Mitsubishi Indonesia plant to make MPV, which is, today, Grand Livina, for us. And we are going to expand this Grand Livina in other parts of the Asia using the Mitsubishi Indonesia. In addition to that, as we know that Mitsubishi is very strong in the pickup, which is Triton, and now we are working very closely with Mitsubishi to use the common powertrain, common transmission, but also to have common modules on the next Triton X next Navara. And finally, when we come on the operational efficiency, today, with Mitsubishi, we are using the common logistics companies, we are using the common warehouses and so on. So hence, when it comes to product, plant, processes, people, we are now having a great synergy with Mitsubishi in Asia, and we would like to utilize more and more to boost our performance in this region.

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Unidentified Company Representative, [33]

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[Interpreted] We are running out of time. So I’m sorry say, but we will take 2 more people to ask the question. The first one, NHK, (inaudible)

Sorry, you are on mute. You are not — are muted. Please turn…

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Unidentified Participant, [34]

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[Interpreted] (inaudible) speaking from NHK. Can you hear me? NHK (inaudible) speaking, can you hear me?

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Unidentified Company Representative, [35]

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[Interpreted] Yes, please proceed and continue your question.

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Unidentified Participant, [36]

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[Interpreted] I have 2 points. The first point. The appropriate level of production capacity, high to 5.4 million. I think it’s going to be a substantial reduction. Indonesia, Barcelona, in North America, you have the programs to reduce 5.4 million? Or are there any additional places where you reduce your production capacity? Barcelona closure, consultation about that. How come you have come to this situation? Is that the market characteristics, Indonesia, Barcelona? By what time are you going to close? To the extent you can talk about it, can you tell us until what time you are going to close them? Second question, with corona, post-corona society related question. Now future mobility, how it should be, how this future business should be? What is Nissan’s idea philosophy and routine operation, work style, supply chain, creation, what are the changes because of corona outbreak?

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [37]

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[Interpreted] Second question, because of the corona outbreak, what will happen to future mobility? Novel coronavirus damaged all aspects of the society, the medical system society system, business system, all social distancing, business models, everything changed because of the outbreak. Future mobility is not an exception. It is impacted, for example, the mobility development is the history of civilization. People move, but there is a possibility of stopping that mobility. It is threatening to auto industry. And however, the privately owned car can be a device to ensure the distancing. So value of cars would be recognized once again. Private mobility is more needed than the autonomous driving and ride share. Look what we have proposed since past agrees well with the need for private mobility. So as necessary, we would like to recognize that renewed needs and requirements. Now, but when it comes to work style, we are working remotely now these days. And little by little, the, for example, leave of child rearing, for example, men employees are taking leave for child rearing. It was rather difficult for men employees to do that. And our conventional thinking was that we have to be the company to talk about many things. But bearing this current situation in mind, we will be able to strike proper balance about that. Post-corona, with corona, what will happen to corona outbreak considering those future prospects, the well-balanced rational way of work style would be something that we would be able to discuss and review because of this current experience. The first question. Indonesia, details about Indonesia, it’s already confirmed. So Ashwani-san, who is in charge of the operation, will explain. But regarding Barcelona, the directionality is something that we determined today, only the directionality. So how we proceed about that direction, we will have to talk with the employees, and we will have to talk with the relevant government. So the details, I don’t think we will be able to be in a position to speak about it today at this press conference.

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Ashwani Gupta, Nissan Motor Co., Ltd. – Representative Executive Officer, Chief Performance Officer, COO & Director [38]

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So I think your question was about Indonesia or Barcelona?

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Unidentified Participant, [39]

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Indonesia.

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Ashwani Gupta, Nissan Motor Co., Ltd. – Representative Executive Officer, Chief Performance Officer, COO & Director [40]

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Okay. For Indonesia, we used to have 6% market share with SUV and MPV. Of course, we went for the volume expansion, and we built 200,000 capacity based on 10% market share ambition, and the TIV for Indonesia goes to 2 million instead of 1 million, but the reality is, we are now at 1% market share and 1 million TIV, which means we are no more able to operate our plant. However, the customer, we have are more than 300,000, and the DNA, which Nissan has in Indonesia, is about SUV and MPV. And this is the reason we decided to launch Kicks e-POWER and Serena, and we will continue with the CBU in Indonesia. We will go for profitable growth. And today, we are comfortable with the size of the operations, we will rethink about the manufacturing in Indonesia.

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Unidentified Company Representative, [41]

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[Interpreted] (Operator Instructions) So free journalist, [Okazaki-san, Kaouru Okazaki-san.]

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Unidentified Analyst, [42]

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[Interpreted] I have 2 questions. Uchida-san, earlier you said that the new product launches were delayed, especially in Japan. That’s what we see. What was the reason behind the delays in product launches? There are a lot of boom in SUV, but you had only X-Trail in Japan, which was very abnormal. I mean, isn’t this — what kind of discussions did they took place at the top management and resulted in this product plan? Could you give us your straightforward answer to this question. And the other one, because you are a car maker, you have to build popular vehicles, popular products. That’s the basic. The other day at the Alliance communication, you said, together with — you are going to have common platforms with Mitsubishi Motors and Renault. This is very convincing, understandable, but upper body will be common to reduce this cost by 40%. That’s what you said. Upper body, I mean, which part are you talking about? When you talk about upper body, upper body, is it about the exterior of the upper body? If so, are you going to have to adopt the common upper body among the different brands while you retain or restore Nissan-ness? That’s my question.

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [43]

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[Interpreted] Second question, Alliance communication, upper body. As you pointed out, upper body brand Nissan-ness will be determined by upper body. But if you look back in relations with Renault, a bit — because we had the challenging volume task, each partner try to minimize cannibalization, avoid cannibalization as much as possible. And as a result, we look for significant differentiation between the 2, and this resulted in less efficiency in investment. Therefore, it doesn’t mean that we are going to adopt identical upper body and cross batch. That’s not our intention. With the minimal brand advantage or this differentiation will be attained while we can use existing assets. For example, in models, doors, we will look for adoption of common doors. Looking at 1 door, if we have same doors, the cars will look identical. But there are other successful models where they adopt common doors, but they look different. So we — based on the reflection of lessons learned, we are trying to do more to make it efficient.

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Unidentified Company Representative, [44]

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[Interpreted] We are running out of time. So with this, we would like to conclude the session. But lastly, Uchida-san would like to say a few remarks.

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Makoto Uchida, Nissan Motor Co., Ltd. – Representative Executive Officer, CEO, President & Director [45]

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[Interpreted] Thank you very much for many questions, for the tough and frank ones, but I will keep these in mind as I continue to fulfill my duties with a strong sense of responsibility. Our pathway to recovery will not be a smooth one. With the stringent regulations, transformation of technologies to this and we need to make investments and survive. And there are a lot of challenges to address to make this happen. Our pathway will not be an easy one. However, Nissan is blessed with a lot of extremely talented employees. We are working together to overcome the crisis. What I want to see is for Nissan to retain its Nissan-ness and demonstrate it continuously. I believe that Nissan is about people focus and pursuing technologies and services relevant to customers. Nissan’s electrification initiatives are not only for better environment. Our technologies and products must offer driving pleasure, joy. This is demonstrated by the new driving experience of e-POWER and the soon-to-be revealed Ariya car that offers an amazing driving experience and excitement to people. Our autonomous driving technology is also designed to assist customers around the world. Nissan is constantly delivering new values to customers. To do this, we will continue to take on challenges and make breakthroughs. This is Nissan’s DNA.

The COVID-19 pandemic has brought significant changes to all our lifestyles. And the auto industry is at a major turning point. Even in this challenging environment or new era, Nissan intends to remain people-focused, to deliver technology for all people and to continue addressing challenges as only Nissan can.

We thank you in advance for your ongoing support. Thank you for joining the session. With this, we would like to conclude the session. We will show you a closing VTR. Thank you for joining.

(presentation)

[Portions of this transcript that are marked Interpreted were spoken by an interpreter present on the live call.]

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