New Nissan CEO pledges better performance, cooperation with Renault

New Nissan CEO pledges better performance, cooperation with Renault
Known for his straight-talking manner and relentless focus on cost control, Makoto Uchida is Nissan’s third CEO since September. (AFP)
Updated 02 December 2019

New Nissan CEO pledges better performance, cooperation with Renault

New Nissan CEO pledges better performance, cooperation with Renault
  • Known for his straight-talking manner and relentless focus on cost control, Makoto Uchida is Nissan’s third CEO since September
  • Nissan is bracing for its lowest annual profit in 11 years and has slashed its dividend by 65 percent

YOKOHAMA: Nissan Motor Co. chief executive Makoto Uchida said on Monday that he would work to improve the automaker’s financial performance and co-operate closely with alliance partner Renault SA, while maintaining Nissan’s independence.
Uchida became CEO of Nissan on Dec. 1, as Japan’s No. 2 car maker tries to recover from a profit slump and draw a line under a year of turmoil after the Carlos Ghosn scandal.
Nissan is betting that bringing new blood into its executive ranks will help to get the company back on track financially after years of aggressive expansion in the United States and other regions pummeled overall profitability.
The new executive team, which also includes CFO Stephen Ma and COO Ashwani Gupta, took the helm this month, a year after former chairman Ghosn was arrested on financial misconduct charges in Japan.
Known for his straight-talking manner and relentless focus on cost control, Uchida is Nissan’s third CEO since September, when Hiroto Saikawa, a protege of Ghosn, was forced to resign after he admitted to being improperly overpaid.
Uchida, 53, replaced Yasuhiro Yamauchi, a company veteran and former COO who stepped down as interim CEO at the end of November.
A big task lies ahead of him and his team. Nissan is bracing for its lowest annual profit in 11 years and has slashed its dividend by 65 percent. Its struggles come at a time when car companies desperately need scale to keep up with sweeping technological changes like electric vehicles and ride-hailing.
Earnings have been undercut, particularly in the United States, a key market, by years of heavy discounts and low-margin sales to rental firms as part of a strategy to raise market share, which has cheapened Nissan’s brand image.
Uchida must also salvage ties with Renault. Since Ghosn’s ouster as chairman of both companies, Nissan and Renault have squabbled over the selection of Nissan’s board members and executives, as well a proposed tie-up between Renault and Fiat Chrysler (FCA) earlier this year, which ultimately failed.
Renault, which holds a 43.4 percent stake in Nissan after it saved the Japanese automaker from financial ruin two decades ago, has for years been pursuing closer ties with its bigger partner, only to be rebuffed by Nissan.
Nissan is implementing a global recovery plan under which it will axe nearly one-tenth of its workforce and cut global vehicle production by 10 percent through 2023 to rein in costs which it has said ballooned when Ghosn was CEO.


WEEKLY ENERGY RECAP: A mixed week for oil with investors regaining confidence

WEEKLY ENERGY RECAP: A mixed week for oil with investors regaining confidence
Updated 17 January 2021

WEEKLY ENERGY RECAP: A mixed week for oil with investors regaining confidence

WEEKLY ENERGY RECAP: A mixed week for oil with investors regaining confidence
  • For 2021, OPEC forecast global oil demand to increase by 5.9 million bpd

It was a very mixed week, with oil prices remaining relatively steady despite mixed bearish developments. The commodity market is seeing renewed confidence from investors who have pushed oil prices more than 40 percent since the end of October 2020 after a series of coronavirus vaccine breakthroughs, which raised expectations for a sustained recovery in oil consumption.

On the week closing, Brent crude price made the first weekly decline in three weeks when it fell to $55.10 per barrel. The WTI ended the week slightly up at $52.36 per barrel. The Brent crude weekly price drop came amid the highest increase in COVID-19 cases in China in more than 10 months, which have led to isolation measures and weighed on oil market sentiment.

This week bearish news came mostly from China (the largest oil importer) after its crude oil imports slumped to 9.1 million barrels per day (bpd) in December 2020, from 11.1 million bpd in November 2020. That is the lowest oil import level in 27 months.

The US is planning a stimulus package that some hope will revive its economy and help oil market recovery. The US Energy Information Administration (EIA) reported the latest US crude inventories were lower for the fifth straight week, dropping by 3.2 million barrels. The EIA also surprised the market with its pessimistic forecast for US crude oil production to average 11.1 million bpd in 2021, down by 200,000 bpd from the 2020 average production level.

On the other hand, the OPEC monthly oil market report gave an optimistic oil supply outlook for US shale oil in 2021. With oil prices increasing, OPEC expects oil output to recover more in the second half of 2021 but this is very unlikely to hamper OPEC+ efforts to rebalance if oil demand goes to pre-pandemic levels.

The OPEC monthly report shows total commercial oil stocks for the OECD were at 163.1 million barrels above the latest five-year average for November 2020, which is the latest available data.

OPEC left its forecast for world oil demand unchanged, which has declined by 9.8 million bpd to an average of 90 million bpd in 2020. For 2021, OPEC forecast global oil demand to increase by 5.9 million bpd to average 95 million bpd.

OPEC reported mixed results for global refining margins in December 2020, slightly improving in the US but weaker in Europe. The surge in crude oil prices weighed further on Asian refining economics after returning from the autumn peak maintenance season. That contributed to a slight rise in available spare capacity as it awaits the right economic incentives.

OPEC reported US refinery use rates increased in December 2020 to average 79.14 percent while European refinery use averaged 65.32 percent. In selected Asia countries — China, India, Japan, Singapore and South Korea — refinery use rates increased, averaging 89.83 percent in December, corresponding to a throughput of 25.52 million bpd.

• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq