Nissan's global business transformation plan is “on track”, the Japanese car maker's global chief operating officer Ashwani Gupta said on Tuesday.
The Nissan Next transformation plan, which was unveiled in May 2020, is based on rationalisation, Mr Gupta said during a media roundtable in Dubai. The plan also focuses on quality sales and investing for future growth.
“We targeted $3 billion worth of fixed-cost reduction in three years. We have now achieved more than $3.5bn worth of fixed-cost reduction in one and a half years,” Mr Gupta said.
Moving forward, electrification is the new pillar to boost synergies among the three companies [Nissan, Renault and Mitsubishi]
Ashwani Gupta,
global chief operating officer of Nissan
The car manufacturer, which posted losses earlier this year and in 2020 after the abrupt downfall of its former chief Ghosn and the onset of the Covid-19 pandemic, is returning to profit and has also transformed its culture from volume to value for all regions, Mr Gupta said.
“At that time, we targeted net revenue per unit to improve by 10 per cent. We have now achieved 11 per cent,” he said.
Nissan's management also believed that cost cutting has to be accompanied with investment in the right technology and products. The car manufacturer released 12 products globally in 18 months, Mr Gupta said.
Nissan, which is part of an alliance that includes French car maker Renault and smaller Japanese car company Mitsubishi Motors, also applied the change in mindset as part of its restructuring to the partnership.
“As part of Nissan Next, we went for a cultural change in the alliance mindset from ‘synergies for synergies’ to ‘synergies for performance’. Moving forward, electrification is the new pillar to boost synergies among the three companies. We will share synergies on battery, electric platform and the power train,” Mr Gupta said.
Nissan owns 15 per cent of Renault, which holds a 43 per cent stake in Nissan. The government of France owns 15 per cent of Renault.
The company recently faced a series of trials, from weak demand during the pandemic to the fallout from the arrest of former boss Carlos Ghosn, now an international fugitive after he jumped bail and fled Japan.
The electrification of its fleet is a major plank of Nissan’s Ambition 2030 plan, according to Mr Gupta. The other pillars underpinning this initiative are self-driving technology and digitalisation.
“We will have 100 per cent electrified offerings by 2030,” he said.
Nissan was the first car maker to unveil the battery electric car Leaf in 2010. As part of its electrification plans, Nissan committed to invest 2 trillion yen ($18 billion) in the next five years in its product line-up, the electrification of plants and establishment of battery plants around the world.
The car maker aims to have a battery capacity of more than 50 gigawatts by 2026 and more than 130 gigawatts by 2030, according to Mr Gupta.
“We aim to increase our profitability by 5 per cent after this investment,” he said.
“We should not do electrification for the sake of electrification. We have full confidence in a smooth transition from ICE [internal combustion engines] to power engines.”
Referring to how customers in Europe are taking the lead in electric vehicle adoption, Mr Gupta attributed it to a lower total cost of ownership of a battery-powered car versus an ICE car.
However, in the US and Middle East, the cost of ownership of an EV and operational costs are high, he said.
“We need to make sure electrification is competitively priced to benefit the customer,” he said.
Nissan also announced that it will become carbon neutral across its entire product life cycle by 2050. In that regard, it announced plans to build the UK’s first car battery “gigafactory” with an investment of £1bn ($1.4bn) in July this year.
The Japanese car maker aims to achieve a 20 per cent market share in the GCC in 2022 fiscal year. Refusing to disclose the region’s current market share, Mr Gupta said the company enjoys a better profit and market share than the global average.
“The majority of the market share is driven by [our] Patrol [model]. This region needs very strong, robust and durable sports utility vehicles with advanced technology. The Pathfinder is complementary to the Patrol,” he said.
Referring to the global chip shortage plaguing car makers, Mr Gupta said: “Two years before the pandemic, our challenge was how to sell. Now, our challenge is how to produce. The more we produce, the more we sell.”
Nissan was forced to cut 22 per cent of its production in October this year and also a certain percentage in November owing to the chips shortage, he said.
“This will continue until at least the first half of the 2022 fiscal year. It should get better,” Mr Gupta said.
He also cited the Suez Canal traffic jam, lockdowns in South-East Asia and Japan quarantine measures as other reasons that contributed to delays in Nissan’s production supply chain.
The Porpoise
By Mark Haddon
(Penguin Random House)
THE SPECS
Engine: 4.0L twin-turbo V8
Gearbox: eight-speed automatic
Power: 571hp at 6,000rpm
Torque: 800Nm from 2,000-4,500rpm
Fuel economy, combined: 11.4L/100km
Price, base: from Dh571,000
On sale: this week
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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Company%20Profile
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The specs
Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder
Power: 220 and 280 horsepower
Torque: 350 and 360Nm
Transmission: eight-speed automatic
Price: from Dh136,521 VAT and Dh166,464 VAT
On sale: now
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
How the bonus system works
The two riders are among several riders in the UAE to receive the top payment of £10,000 under the Thank You Fund of £16 million (Dh80m), which was announced in conjunction with Deliveroo's £8 billion (Dh40bn) stock market listing earlier this year.
The £10,000 (Dh50,000) payment is made to those riders who have completed the highest number of orders in each market.
There are also riders who will receive payments of £1,000 (Dh5,000) and £500 (Dh2,500).
All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200 (Dh1,000), the company said when it announced the scheme.
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
FIXTURES
Monday, January 28
Iran v Japan, Hazza bin Zayed Stadium (6pm)
Tuesday, January 29
UAEv Qatar, Mohamed Bin Zayed Stadium (6pm)
Friday, February 1
Final, Zayed Sports City Stadium (6pm)
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Sukuk explained
Sukuk are Sharia-compliant financial certificates issued by governments, corporates and other entities. While as an asset class they resemble conventional bonds, there are some significant differences. As interest is prohibited under Sharia, sukuk must contain an underlying transaction, for example a leaseback agreement, and the income that is paid to investors is generated by the underlying asset. Investors must also be prepared to share in both the profits and losses of an enterprise. Nevertheless, sukuk are similar to conventional bonds in that they provide regular payments, and are considered less risky than equities. Most investors would not buy sukuk directly due to high minimum subscriptions, but invest via funds.
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
When Umm Kulthum performed in Abu Dhabi
Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.
