Nissan's Dilemma: Value Creation Is More Urgent Than Cost Cutting

A letter signed by Noritaka Tsuru, a reader from Yokohama, Japan, has recently drawn industry attention. It directly identifies the essence of Nissan's current crisis — not the financial distress Nissan faced at the end of the 20 Centurys under Carlos Ghosn, but a systemic decline triggered by long-term strategic misalignment.

Product Hollowing-Out: A Lineup Without a Major Refresh in a Decade

The letter points out that Nissan's primary challenge stems from severe underinvestment in new models. Its current product portfolio has been drastically streamlined, with several core model lines unchanged for over ten years. More critically, after Ghosn's departure, management proactively halted multiple major facelift and redesign programs to cut R&D spending. This 'cutting-to-substitute-building' logic has led to a continuous erosion of product competitiveness and a steady decline in market visibility.

Cost-First Culture: From Lifeline to Growth Constraint

The 'cost-cutting' philosophy that saved Nissan in 1999 has, over 25 years, evolved into a deeply entrenched organizational habit. The letter describes it as having 'hardened into the operating system' — where cost considerations dominate every decision, overshadowing user value and technological advancement. Recent rounds of structural streamlining, plant consolidation, and workforce reduction have delivered short-term financial improvements, yet failed to reverse deeper trends: weakening brand premium, declining customer loyalty, and eroding market relevance.

The Way Forward Lies in Value Reconstruction — Not Reinstating the Past

The author stresses that Nissan's next phase of transformation must pivot toward value creation: delivering products compelling enough for consumers to pay full price. This requires unlocking its legacy technical assets, design DNA, and manufacturing heritage. Yet a more pressing question remains — after decades of 'cutting costs, not creating value,' do its engineering teams and key suppliers still retain the original capability to define the next generation of vehicles?

The letter concludes unequivocally: 'Cost cutting alone cannot build a skyline. At the very least, recalling Carlos Ghosn is not the right answer.'