By Maki Shiraki, Daniel Leussink and Norihiko Shirouzu

TOKYO, March 7 (Reuters) -

Directors of Japan's third-largest automaker Nissan

will discuss potential successors to CEO Makoto Uchida at a

meeting on March 11, as his position has become untenable given

the worsening performance of the company, three people familiar

with the matter said.

Candidates being considered include Chief Financial Officer

Jeremie Papin and Chief Planning Officer Ivan Espinosa, one of

the people and a fourth person said, but neither are seen as a

certainty, especially considering their association with current

management missteps.

The next CEO could be installed as a temporary or

transitional leader, an option that would give the board more

time to find a permanent replacement, the fourth person said.

The people declined to be identified because the information

has not been made public. A Nissan representative declined to

comment. The March 11 meeting date was first reported by Kyodo

News.

Chief Performance Officer Guillaume Cartier also was

being considered alongside Papin and Espinosa, the Yomiuri

newspaper reported.

Shares of Nissan gained 1.8% in Tokyo, outperforming a

2.2% decline in the Nikkei index.

Uchida's potential ouster follows the collapse last month of

talks to merge with Honda ( HMC ).

The carmakers had been discussing a tie-up to create a $60

billion company but those negotiations were soon strained by

disagreements, including over the balance of power between the

longtime rivals.

The deal was ultimately sunk after Honda ( HMC ) proposed making

Nissan a subsidiary, Reuters has reported.

There is now speculation that Nissan could look to tie up

with Taiwanese electronics company Foxconn, which has a

nascent electric vehicle business headed by a former Nissan

executive, Jun Seki.

Seki has been mentioned by domestic media as potential

successor if Nissan were to

tie up

with Honda ( HMC ), Foxconn and Mitsubishi Motors through

a four-way deal.

The turmoil at the top of Nissan is the latest turn in a

long-running drama that was sparked by the ouster of former

Chairman Carlos Ghosn in late 2018 and would mean the fourth CEO

in less than six years.

While legacy automakers face a profound threat from

Chinese EV makers, which have upended the industry with sleek,

software-rich cars, Nissan is facing much deeper structural

challenges than most rivals, having never fully recovered from

the years of crisis and management turnover brought by Ghosn's

exit.

For years it focused on volume over value, eroding its

brand image. Despite being an EV pioneer with the Leaf, it never

enjoyed the boom or profits of Tesla.

It also misread demand for hybrids in the United States,

a costly mistake it is now scrambling to fix. Now it faces

potential tariffs on vehicles it exports to the United States

from Mexico, a major

manufacturing hub

.

JUNK STATUS

Fitch Ratings last month cut Nissan's ( NSANF ) rating to "junk",

snuffing out its last remaining investment-grade status from a

major credit rating agency and highlighting the automaker's

"persistently low" profitability and the uncertainty surrounding

its turnaround plan.

Nissan has some 1.8 trillion yen ($12.2 billion) in

bonds outstanding, according to LSEG data, with 233 billion yen

worth of bonds coming due this year. It has plenty of cash and a

strong balance sheet, but analysts have repeatedly pointed out

the potential for longer-term pain if it cannot turn its

business around.

Nissan has previously had interim leaders. In 2019, the

automaker installed company veteran Yasuhiro Yamauchi as interim

CEO following the ouster of Ghosn's successor Hiroto Saikawa.

The denouement for Uchida was first flagged by Reuters in

December, when a source said that subsequent months would be

critical for his and Nissan's ( NSANF ) future.

Uchida has said that ending the malaise at Japan's

third-biggest automaker was the most pressing issue for him to

tackle, after which he would be willing to bow out.

($1 = 147.5400 yen)