NISSAN MOTORS CORPORATION

A Case Study

Submitted by: Carl Raphael T. Lazarte

Grade & Section: 12- Gokongwei

Submitted to: Sir. Renato Berosil

I.Company Logo
II. Company Slogan/Taglines
 III. Time Context

Nissan name first used in 1930s

In 1928, Yoshisuke Aikawa founded the holding company Nihon Sangyo
(日本産業 Japan Industries or Nihon Industries). The name 'Nissan' originated
during the 1930s as an abbreviation used on the Tokyo Stock Exchange for
Nihon Sangyo. This company was Nissan "Zaibatsu" which included Tobata
Casting and Hitachi. At this time Nissan controlled foundries and auto parts
businesses, but Aikawa did not enter automobile manufacturing until 1933.
The zaibatsu eventually grew to include 74 firms, and became the
fourth-largest in Japan during World War II.
In 1931, DAT Jidosha Seizo became affiliated with Tobata Casting, and
was merged into Tobata Casting in 1933. As Tobata Casting was a Nissan
company, this was the beginning of Nissan's automobile manufacturing.

Nissan Motor organized in 1934

In 1934, Aikawa separated the expanded automobile parts division of
Tobata Casting and incorporated it as a new subsidiary, which he named
Nissan Motor Co., Ltd. ( 日産自動車 Nissan Jidōsha). The shareholders of the
new company however were not enthusiastic about the prospects of the
automobile in Japan, so Aikawa bought out all the Tobata Casting
shareholders (using capital from Nihon Industries) in June 1934. At this
time, Nissan Motor effectively became owned by Nihon Sangyo and Hitachi.
In 1935, construction of its Yokohama plant was completed. 44 Datsuns
were shipped to Asia, Central and South America. In 1935, the first car
manufactured by an integrated assembly system rolled off the line at the
Yokohama plant. Nissan built trucks, airplanes, and engines for the Imperial
Japanese Army. November 1937 Nissan's headquarter was moved to
Hsinking the capital of Manchukuo then in December changed name to
Manchuria Heavy Industries Developing Co.
In 1940, first knockdown kits were shipped to Dowa Jidosha Kogyo
(Dowa Automobile), one of MHID’s companies, for assembly. In 1944, the
head office was moved to Nihonbashi, Tokyo, and the company name was
changed to Nissan Heavy Industries, Ltd., which the company kept through
1949.

Nissan's early American connection

DAT had inherited Kubota's chief designer, American engineer William
R. Gorham. This, along with Aikawa's 1908 visit to Detroit, was to greatly
affect Nissan's future. Although it had always been Aikawa's intention to use
cutting-edge auto making technology from America, it was Gorham that
carried out the plan. Most of the machinery and processes originally came
from the United States. When Nissan started to assemble larger vehicles
under the "Nissan" brand in 1937, much of the design plans and plant
facilities were supplied by the Graham-Paige Company. Nissan also had a
Graham license under which passenger cars, buses and trucks were made.
In David Halberstam's 1986 book The Reckoning, Halberstam states "In
terms of technology, Gorham was the founder of the Nissan Motor Company"
and that "young Nissan engineers who had never met him spoke of him as a
god and could describe in detail his years at the company and his many
inventions."
Austin Motor Company relations (1937–1960s)
From 1934 Datsun began to build Austin 7s under licence. This
operation became the greatest success of Austin's overseas licensing of its
Seven and marked the beginning of Datsun's international success.
In 1952, Nissan entered into a legal agreement with Austin, for Nissan
to assemble 2,000 Austins from imported partially assembled sets and sell
them in Japan under the Austin trademark. The agreement called for Nissan
to make all Austin parts locally within three years, a goal Nissan met. Nissan
produced and marketed Austins for seven years. The agreement also gave
Nissan rights to use Austin patents, which Nissan used in developing its own
engines for its Datsun line of cars. In 1953, British-built Austins were
assembled and sold, but by 1955, the Austin A50 – completely built by
Nissan and featuring a new 1489 cc engine—was on the market in Japan.
Nissan produced 20,855 Austins from 1953 to 1959.
Nissan leveraged the Austin patents to further develop their own
modern engine designs past what the Austin's A- and B-family designs
offered. The apex of the Austin-derived engines was the new design A series
engine in 1966. In 1967, Nissan introduced its new highly advanced four
cylinder overhead cam (OHC) Nissan L engine, which while similar
to Mercedes-Benz OHC designs was a totally new engine designed by Nissan.
This engine powered the new Datsun 510, which gained Nissan respect in
the worldwide sedan market. Then, in 1969 Nissan introduced the Datsun
240Z sports car which used a six-cylinder variation of the L series engine,
developed under Nissan Machinery (Nissan Koki Co., Ltd. 日産工機) in 1964,
a former remnant of another auto manufacturer Kurogane. The 240Z was an
immediate sensation and lifted Nissan to world class status in the automobile
market.
100 Day Strike of 1953
During the Korean War, Nissan was a major vehicle producer for the
U.S. Army. After the Korean War ended, significant levels of anti-communist
sentiment existed in Japan. The union that organized Nissan's workforce was
strong and militant. Nissan was in financial difficulties, and when wage
negotiations came, the company took a hard line. Workers were locked out,
and several hundred were fired. The Japanese government and the U.S.
occupation forces arrested several union leaders.The union ran out of strike
funds, and was defeated. A new labor union was formed, with Shioji Ichiro
one of its leaders. Ichiro had studied at Harvard University on a U.S.
government scholarship. He advanced an idea to trade wage cuts against
saving 2,000 jobs.  Ichiro's idea was made part of a new union contract  that
prioritized productivity. Between 1955 and 1973, Nissan "expanded rapidly
on the basis of technical advances supported – and often suggested – by the
union." Ichiro became president of the Confederation of Japan Automobile
Workers Unions and "the most influential figure in the right wing of the
Japanese labor movement."
Merger with Prince Motor Company
In 1966, Nissan merged with the Prince Motor Company, bringing
more upmarket cars, including the Skyline and Gloria, into its selection. The
Prince name was eventually abandoned, and successive Skylines and Glorias
bore the Nissan name. "Prince," was used at the Japanese Nissan dealership
"Nissan Prince Shop" until 1999, when "Nissan Red Stage" replaced it.
Nissan Red Stage itself has been replaced as of 2007. The Skyline lives on as
the G Series of Infiniti.
Miss Fairlady
To capitalize the renewed investment during 1964 Summer Olympics,
Nissan established the gallery on the second and third floors of the San-ai
building, located in Ginza, Tokyo. To attract visitors, Nissan started using
beautiful female showroom attendants where Nissan held a competition to
choose five candidates as the first class of Nissan Miss Fairladys, modeled
after "Datsun Demonstrators" from the 1930s who introduced cars. The
Fairlady name was used as a link to the popular Broadway play My Fair
Lady of the era. Miss Fairladys became the marketers of the Datsun Fairlady
1500.
In April 2008, 14 more Miss Fairlady candidates were added, for a total of 45
Nissan Miss Fairlady pageants (22 in Ginza, 8 in Sapporo, 7 in Nagoya, 7 in
Fukuoka).
In April 2012, 7 more Miss Fairlady candidates were added, for a total of 48
Nissan Miss Fairlady pageants (26 in Ginza, 8 in Sapporo, 7 in Nagoya, 7 in
Fukuoka).
In April 2013, 6 more Miss Fairlady candidates were added to Ginza
showroom, for a total of 27 48th Ginza Nissan Miss Fairlady pageants.
Foreign expansion
 In the 1950s, Nissan decided to expand into worldwide markets. Nissan
management realized their Datsun small car line would fill an unmet need in
markets such as Australia and the world's largest car market, the United
States. They first showed the Datsun Bluebird at the 1958 Los Angeles Auto
Show. The company formed a U.S. subsidiary, Nissan Motor Corporation
U.S.A., in Gardena, California in 1960, headed by Yutaka Katayama.
[14]
 Nissan continued to improve their sedans with the latest technological
advancements and chic Italianate styling in sporty cars such as the Datsun
Fairlady roadsters, the race-winning 411 series, the Datsun 510 and the
world-class Datsun 240Z. By 1970, Nissan had become one of the world's
largest exporters of automobiles.
In the wake of the 1973 oil crisis, consumers worldwide (especially in
the lucrative U.S. market) began turning to high-quality small economy cars.
To meet the growing demand for its new Nissan Sunny, the company built
new factories in Mexico (Nissan Mexicana was established in the early 1960s
and commenced manufacturing since 1966 at their Cuernavaca assembly
facility, making it their first North American assembly plant), Australia, New
Zealand, Taiwan, United States (Nissan Motor Manufacturing Corporation
USA was established in 1980) and South Africa. The "Chicken Tax" of 1964
placed a 25% tax on commercial vans imported to the United States. In
response, Nissan, Toyota Motor Corp. and Honda Motor Co. began building
plants in the U.S. in the early 1980s. Nissan's initial assembly plant Smyrna
assembly plant (which broke ground in 1980) at first built only trucks such
as the 720 and Hardbody, but has since expanded to produce several car
and SUV lines, including the Altima, Maxima, Rogue, Pathfinder, Infiniti
QX60 and LEAF all-electric car. The addition of mass-market automobiles
was in response to the 1981 Voluntary Export Restraints imposed by the
U.S. Government. An engine plant in Decherd, Tennesseefollowed, most
recently a second assembly plant was established in Canton, Mississippi. In
1970, Teocar was created, which was a Greek assembly plant created in
cooperation with Theoharakis. It was situated in Volos, Greece and its
geographical location was perfect as the city had a major port. The plant
started production in 1980, assembling Datsun pick-up trucks and continued
with the Nissan Cherry & Sunny vehicles. Until May 1995 170,000 vehicles
were made, mainly for Greece.
In order to overcome export tariffs and delivery costs to its European
customers, Nissan contemplated establishing a plant in Europe. Nissan tried
to convert the Greek plant into one manufacturing cars for all European
countries however due to issues with the Greek government not only did
that not happen but the plant itself was closed. After an extensive
review, Sunderland in the north east of England was chosen for its skilled
workforce and its location near major ports. The plant was completed in
1986 as the subsidiary Nissan Motor Manufacturing (UK) Ltd. By 2007, it was
producing 400,000 vehicles per year, landing it the title of the most
productive plant in Europe.
In 2001, Nissan established a manufacturing plant in Brazil. In 2005,
Nissan added operations in India, through its subsidiary Nissan Motor
India Pvt. Ltd. With its global alliance partner, Renault, Nissan invested $990
million to set up a manufacturing facility in Chennai, catering to the Indian
market as well as a base for exports of small cars to Europe. Nissan entered
the Middle East market in 1957 when it sold its first car in Saudi Arabia.
Nissan sold nearly 520,000 new vehicles in China in 2009 in a joint venture
with Dongfeng Motor. To meet increased production targets, Dongfeng-
Nissan expanded its production base in Guangzhou, which would become
Nissan's largest factory around the globe in terms of production
capacity. Nissan also has moved and expanded its Nissan Americas Inc.
headquarters, moving from Los Angeles to Franklin, Tennessee in the
Nashville area.
In 2014, Nissan cars will be produced by Renault-Samsung in South Korea.
This production will start with 80,000 Nissan Rogue/X-Trail produced by
Renault-Samsung Busan factory in South Korea, instead of being produced
by Nissan in Japan.
In the U.S., Nissan has been increasing its reliance on sales to daily-rental
companies like Enterprise Rent-A-Car or Hertz. In 2016, Nissan's rental sales
jumped 37% and in 2017 Nissan became the only major auto maker to
boost rental sales when the Detroit Three cut back less profitable deliveries
to daily-rental companies, which traditionally are the biggest customers of
domestic auto makers.
Relationships with other car companies

Ford Motor Company

In Australia, between 1989 and 1992, Nissan Australia shared models
with Ford Australia under a government-backed rationalisation scheme
known as the Button Plan, with a version of the Nissan Pintara being sold as
the Ford Corsair and a version of the Ford Falcon as the Nissan Ute. A
variant of the Nissan Patrol was sold as the Ford Maverick during the 1988–
94 model years.
In North America, Nissan partnered with Ford from 1993 to 2002 to
market the Ohio built Mercury Villager and the Nissan Quest. The two
minivans were virtually identical aside from cosmetic differences. In 2002,
Nissan and Ford announced the discontinuation of the arrangement.
In Europe, Nissan and Ford Europe partnered to produce the  Nissan
Terrano II and the badge engineered Ford Maverick, a mid-size SUV
produced at the Nissan Motor Ibérica S.A (NMISA) plant in Barcelona, Spain.
The Maverick/Terrano II was a popular vehicle sold throughout Europe and
Australasia. It was also sold in Japan as a captive import, with the Nissan
model marketed as the Nissan Mistral.
Volkswagen
Nissan licensed the Volkswagen Santana. Production began in 1984, at
Nissan's Zama, Kanagawa, and ended in May 1990.
Alfa Romeo
From 1983 to 1987, Nissan cooperated with Alfa Romeo to build
the Arna. The goal was for Alfa to compete in the family hatchback market
segment, and for Nissan to establish a foothold in the European
market. After Alfa Romeo's takeover by Fiat, both the car and cooperation
were discontinued.
General Motors
In Europe, GM and Nissan co-operated on the Light Commercial vehicle
the Nissan Primastar. The high roof version is built in the NMISA plant
in Barcelona, Spain; while the low roof version is built at Vauxhall
Motors/Opel's Luton plant in Bedfordshire, UK
In 2013, GM announced its intentions to rebadge the Nissan
NV200 commercial van as the 2015 model year Chevrolet City Express, to be
introduced by end of 2014. Holden, GM's Australian subsidiary, sold versions
of the Nissan Pulsar as the Holden Astra between 1984 and 1989.
LDV
LDV Group sold a badge engineered light commercial vehicle version of
the Nissan Serena as the LDV Cub from 1996 to 2001. The Nissan equivalent
was marketed as the Nissan Vannette Cargo.

Alliance with Renault

In 1999, with Nissan facing severe financial difficulties, Nissan entered
an alliance with Renault S.A. of France.
Signed on 27 March 1999, the Renault-Nissan Alliance was the first of its
kind involving a Japanese and French car manufacturer, each with its own
distinct corporate culture and brand identity. In the spring of 2000, Yanase,
Japan’s premier seller of imported automobiles, cancelled its licensing
contract with Renault, and Nissan took over as the sole licensee. In June
2001, Carlos Ghosn was named Chief Executive Officer of Nissan. In May
2005, Ghosn was named President of Renault. He was appointed President
and CEO of Renault on 6 May 2009. [63] Nissan's management is a trans-
cultural, diverse team.
The Renault-Nissan Alliance has evolved over years to Renault holding
43.4% of Nissan shares, while Nissan holds 15% of Renault shares. The
alliance itself is incorporated as the Renault-Nissan B.V., founded on 28
March 2002 under Dutch law. Renault-Nissan B.V. is equally owned by
Renault and Nissan.
Under CEO Ghosn's "Nissan Revival Plan" (NRP), the company has
rebounded in what many leading economists consider to be one of the most
spectacular corporate turnarounds in history, catapulting Nissan to record
profits and a dramatic revitalization of both its Nissan and Infiniti model line-
ups. Ghosn has been recognized in Japan for the company's turnaround in
the midst of an ailing Japanese economy. Ghosn and the Nissan turnaround
were featured in Japanese manga and popular culture. His achievements in
revitalizing Nissan were noted by the Japanese Government, which awarded
him the Japan Medal with Blue Ribbon in 2004.
On 7 April 2010, Daimler AG exchanged a 3.9% share of its holdings for
3.9% from both Nissan and Renault. This triple alliance allows for the
increased sharing of technology and development costs, encouraging global
cooperation and mutual development.
On 12 December 2012, the Renault–Nissan Alliance formed a joint
venture with Russian Technologies (Alliance Rostec Auto BV) with the aim of
becoming the long-term controlling shareholder of AvtoVAZ, Russia’s largest
car company and owner of the country's biggest selling brand, Lada. The
takeover was completed in June 2014, and the two companies of the
Renault-Nissan Alliance took a combined 67.1% stake of Alliance Rostec,
which in turn acquired a 74.5% of AvtoVAZ, thereby giving Renault and
Nissan indirect control over the Russian manufacturer. Ghosn was appointed
Chairman of the Board of AvtoVAZ on 27 June 2013.

IV. Company Overview

Established in 1933, Nissan Motor Co., Ltd. was a pioneer in the

manufacturing of automobiles. Nearly 70 years later, Nissan has become one
of the world's leading automakers, with annual production of 2.4 million
units, which represented 4.9 percent of the global market. Domestically, the
company sells 774,000 vehicles on an annual basis, placing it second behind
Toyota Motor Corporation. About 35 percent of Nissan's vehicles are sold in
Japan, 25 percent in the United States, and 20 percent in Europe. In the
North American market, the company's top models include the Infiniti,
Maxima, Altima, and Sentra passenger cars, the Quest minivan, the Frontier
pickup truck, and the Pathfinder sport utility vehicle. After losing money for
most of the 1990s, Nissan entered into a global alliance with Renault S.A. in
March 1999, with the French company taking a 37 percent stake in Nissan. A
massive restructuring was then launched.

History

In 1911 Masujiro Hashimoto, a U.S.-trained engineer, founded the

Kwaishinsha Motor Car Works in Tokyo. Hashimoto dreamed of building the
first Japanese automobile, but lacked the capital. In order for his dream to
come true, he contacted three men--Kenjiro Den, Rokuro Auyama, and
Keitaro Takeuchi--for financial support. To acknowledge their contribution to
his project, Hashimoto named his car DAT, after their last initials. In
Japanese, 'dat' means 'escaping rabbit' or 'running very fast.'

Debuting in 1914, the first DAT was marketed and sold as a ten
horsepower runabout. Another version, referred to as 'datson' or 'son of dat,'
was a two-seater sports car produced in 1918. One year later, Jitsuyo
Jidosha Seizo Company, another Nissan predecessor, was founded in Osaka.
Kwaishinsha and Jitsuyo Jidosha Seizo combined in 1926 to establish the Dat
Jidosha Seizo Company. Five years later, the Tobata Imaon Company, an
automotive parts manufacturer, purchased controlling interest in the
company. Tobata Imaon's objective was to mass-produce products that
would be competitive in quality and price with foreign automobiles.

In 1932, 'Datson' became 'Datsun,' thus associating it with the ancient

Japanese sun symbol. The manufacturing and sale of Datsun cars was taken
over in 1933 by the Jidosha Seizo Company, Ltd., which was established in
Yokohama that year through a joint venture between Nihon Sangyo
Company and Tobata Imaon. In 1934 the company changed its name to
Nissan Motor Co., Ltd., and one year later the operation of Nissan's first
integrated automobile factory began in Yokohama under the technical
guidance of American industrial engineers.
 Datsun cars, however, were not selling as well as expected in Japan.
Major U.S. automobile manufacturers, such as General Motors Corporation
(GM) and the Ford Motor Company, had established assembly plants in
Japan during this time. These companies dominated the automobile market
in Japan for ten years, while foreign companies were discouraged from
exporting to the United States by the Great Depression of 1929.

With the advent of World War II in 1941, Nissan's efforts were directed
toward military production. During wartime, the Japanese government
ordered the motor industry to halt production of passenger cars and,
instead, to produce much needed trucks. Nissan also produced engines for
airplanes and torpedo boats.

Post war Recovery and Overseas Expansion

After World War II, the Japanese auto industry had to be completely
recreated. Technical assistance contracts were established with foreign firms
such as Renault, Hillman, and Willys-Overland. In 1952 Nissan reached a
license agreement with the United Kingdom's Austin Motor Company Ltd.
With American technical assistance and improved steel and parts from
Japan, Nissan became capable of producing small, efficient cars, which later
provided the company with a marketing advantage in the United States.

The U.S. market was growing, but gradually. Nonetheless, Nissan felt
that Americans needed low-priced economy cars, perhaps as a second family
car. Surveys of the U.S. auto industry encouraged Nissan to display its cars
at the Imported Motor Car Show in Los Angeles. The exhibition was noticed
by Business Week, but as an analyst wrote in 1957, 'With over 50 foreign
car makers already on sale here, the Japanese auto industry isn't likely to
carve out a big slice of the U.S. market for itself.'

Nissan considered this criticism as it struggled to improve domestic

sales. Small-scale production resulted in high unit costs and high prices. In
fact, a large percentage of Datsun cars were sold to Japanese taxi
companies. Yet Kawamata, the company's new and ambitious president, was
determined to increase exports to the United States. Kawamata noted two
principal reasons for his focus on exports: 'Increased sales to the U.S.A.
would give Nissan more prestige and credit in the domestic markets as well
as other areas and a further price cut is possible through mass producing
export cars.'

By 1958 Nissan had contracted with two U.S. distributors, Woolverton

Motors of North Hollywood, California, and Chester G. Luby of Forest Hills,
New York. Nevertheless, sales did not improve as quickly as Nissan had
hoped. As a result, Nissan sent two representatives to the United States to
help increase sales: Soichi Kawazoe, an engineer and former employee of
GM and Ford; and Yutaka Katayama, an advertising and sales promotion
executive. Each identified a need for the development of a new company to
sell and service Datsuns in the United States. By 1960 Nissan Motor
Corporation, based in Los Angeles, had 18 employees, 60 dealers, and a
sales total of 1,640 cars and trucks. The success of the Datsun pickup truck
in the U.S. market encouraged new dealerships.

Datsun assembly plants were built in Mexico and Peru during the
1960s. In 1966 Nissan merged with the Prince Motor Company Ltd.--gaining
the Skyline and Gloria models--and two years later Datsun passenger cars
began production in Australia. During 1969 cumulative vehicle exports
reached one million units. This was a result of Katayama and Kawazoe's
efforts to teach Japanese manufacturers to build automobiles comparable to
U.S. cars. This meant developing mechanical similarities and engine
capacities that could keep up with American traffic.

The introduction of the Datsun 240Z marked the debut of foreign

sports cars in the U.S. market. Datsun began to receive good reviews from
automotive publications in the United States, and sales began to improve.
Also at this time, the first robotics were installed in Nissan factories to help
increase production.

1970s and 1980s: From Economy Cars to Luxury Sedans

In 1970, Japan launched its first satellite on a Nissan rocket. Only five
years later, Nissan export sales reached $5 million. But allegations surfaced
that Nissan U.S.A. was 'pressuring and restricting its dealers in various
ways: requiring them to sell at list prices, limiting their ability to discount,
enforcing territorial limitations,' according to author John B. Rae. In 1973
Nissan U.S.A. agreed to abide by a decree issued from the U.S. Department
of Justice that prohibited it from engaging in such activities.

The 1970s marked a slump in the Japanese auto industry as a result of

the oil crisis. Gasoline prices started to increase, and then a number of other
difficulties arose. U.S. President Richard Nixon devalued the dollar and
announced an import surcharge: transportation prices went up and export
control was lacking. To overcome these problems, Nissan U.S.A. brought in
Chuck King, a 19-year veteran of the auto industry, to improve
management, correct billing errors, and minimize transportation damages.
As a result, sales continued to increase with the help of Nissan's latest
model, the Datsun 210'Honeybee,' which was capable of traveling 41 miles
on one gallon of gas.

In 1976 the company began the production of motorboats. During this

time, the modification of the Datsun model to U.S. styling also began.
Additions included sophisticated detailing, roof racks, and air conditioning.
The new styling of the Datsun automobiles was highlighted with the
introduction of the 1980 model 200SX.

During the 1980s Nissan established production facilities in Italy, Spain,

West Germany, and the United Kingdom. An aerospace cooperative
agreement with Martin Marietta Corporation also was concluded, and the
Nissan CUE-X and MID4 prototypes were introduced. In 1981, the company
began the long and costly process of changing its name from Datsun to
Nissan in the U.S. market.

The new generation of Nissan automobiles included high-performance

luxury sedans. They featured electronic control, variable split four-wheel
drive, four-wheel steering, an 'intelligent' engine, and a satellite navigation
system, as well as other technological innovations. Clearly, the management
of Nissan had made a commitment to increase expenditures for research and
development. In 1986 Nissan reported that the company's budget for
research and development reached ¥170 billion, or 4.5 percent of net sales.

During the late 1980s, Nissan evaluated future consumer trends. From
this analysis, Nissan predicted that consumers would prefer a car with high
performance, high speed, innovative styling, and versatile options. All of
these factors were taken into account to form 'a clear image of the car in the
environment in which it will be used,' said Yukio Miyamori, a director of
Nissan. Cultural differences also were considered in this evaluation. One
result of this extensive market analysis was the company's 1989 introduction
of its Infiniti line of luxury automobiles.

The use of robotics and computer-aided design and manufacturing

reduced the time required for computations on aerodynamics, combustion,
noise, and vibration characteristics, enabling Nissan to have an advantage in
both the domestic and foreign markets. The strategy of Nissan's
management during the late 1980s was to improve the company's
productivity and thus increase future competitiveness.

Sustained Difficulties in the 1990s

By the start of the next decade, however, Nissan's fortunes began to

decline. Profits and sales dropped, quelling hopes that the 1990s would be
as lucrative as the 1980s. Nissan was not alone in its backward tumble,
however: each of the major Japanese car makers suffered damaging blows
as the decade began. The yen's value rose rapidly against the dollar, which
crimped U.S. sales and created a substantial price disparity between
Japanese and U.S. cars. At the same time, the United States' three largest
automobile manufacturers showed a surprising resurgence during the early
1990s. According to some observers, Japanese manufacturers had grown
complacent after recording prolific gains to surpass U.S. manufacturers. In
the more cost-conscious 1990s, they allowed the price of their products to
rise just as U.S. manufacturers reduced costs, improved efficiency, and
offered more innovative products.

In addition, the global recession that sent many national economies

into a tailspin in the early 1990s caught Nissan with its resources thinly
stretched as a result of its bid to unseat its largest Japanese rival, Toyota
Motor Corporation. Toyota, much larger than Nissan and possessing deeper
financial pockets, was better positioned to sustain the losses incurred from
the global economic downturn. Consequently, Nissan entered its ninth
decade of operation facing formidable obstacles.

The first financial decline came in 1991, when the company's

consolidated operating profit plummeted 64.3 percent to ¥125 billion
(US$886 million). Six months later, Nissan registered its first pretax loss
since becoming a publicly traded company in 1951--¥14.2 billion during the
first half of 1992. The losses mounted in the next two years, growing to
¥108.1 billion in 1993 and ¥202.4 billion by 1994, or nearly US$2 billion. To
arrest the precipitous drop in company profits, Nissan's management
introduced various cost-cutting measures--such as reducing its materials
and manufacturing costs--which saved the company roughly US$1.5 billion
in 1993, with an additional US$1.2 billion savings realized in 1994. Nissan
also became the first Japanese company to close a plant in Japan since
World War II and cut nearly 12,000 workers in Japan, Spain, and the United
States from its payroll. Nissan also was staggering under a debt load that
reached as high as US$32 billion and threatened to bankrupt the company.
Only intervention from Nissan's lead lender, Industrial Bank of Japan, kept
the company afloat.

There were some positive signs in the early 1990s to inspire hope for
the future. Nissan's 1993 sales increased nearly 20 percent, vaulting the car
maker past Honda Motor Co., Ltd. to reclaim the number two ranking in
import sales to the all-important U.S. market. Much of this gain was
attributable to robust sales of the Nissan Altima, a replacement for its
Stanza model, which was introduced in 1992 and marketed in the United
States as a small luxury sedanpriced under $13,000. To the joy of Nissan's
management, however, the Altima typically was purchased with various
options added on, giving the company an additional $2,000 to $3,000 per
car. Nissan also was encouraged by strong sales of its Quest minivan, which
was introduced in the United States in 1992 and had been developed jointly
with Ford Motor, which marketed its own version, the Ford Windstar.

Nissan's losses continued through the fiscal year ending in March

1996, cumulating to US$3.2 billion over a four-year span. The company's
return to profitability in fiscal 1997 came about in part because of the cost-
cutting program and in part from the yen's dramatic depreciation against the
dollar. Despite the return to the black, Nissan remained a troubled company.
From its 1972 peak of 34 percent, the company's share of the Japanese auto
market had fallen to 20 percent by early 1997. Competition from the more
financially stable Toyota and Honda played a factor in this decline, but
Nissan also hurt itself by failing to keep pace with changing consumer tastes
both in Japan and in overseas markets. For example, Nissan was behind its
rivals in adding minivans and sport utility vehicles to its product lineup,
having for years dismissed these sectors as passing fads. Meanwhile,
minivans, sport utility vehicles, and station wagons accounted for half of all
passenger car sales in Japan by early 1997, up from just more than ten
percent in 1990. In the U.S. market, the Altima lost ground to two midsized
rivals, the Honda Accord and the Toyota Camry, because Nissan's model was
smaller and thus less desirable. In the luxury car sector, Toyota's Lexus line
became the hot brand in the United States, triumphing over the Infiniti.
Because of these and other factors, Nissan returned to the red for fiscal
years 1998 and 1999. Although the losses were not as large as earlier in the
decade, the company's continued sky-high debt load--which stood at
US$19.7 billion in late 1998--did not bode well for Nissan's future.

1999 and Beyond: The Renault Era

The late 1990s was a period of intense consolidationin the auto

industry, stemming from rapid globalization, the increasing cost of
developing ever more sophisticated vehicles, and worldwide automotive
production overcapacity. The November 1998 merger of Daimler-Benz AG
and Chrysler Corporation that formed DaimlerChrysler AG was the largest
partnership created in this period, but there were a number of smaller
mergers, acquisitions, and strategic alliances as well. Both Nissan and
Renault S.A. of France were eagerly looking for a partner in order to
compete in the 21st century. Nissan was rebuffed by both DaimlerChrysler
and Ford and Renault was turned away by other Japanese automakers,
before the two companies reached an agreement on a global alliance in
March 1999. The combination of Nissan and Renault made strategic sense in
that the companies' main sales territories and production locales were
complementary. In vehicle sales, Nissan was strongest in Japan and other
parts of Asia, the United States, Mexico, the Middle East, and South Africa,
while Renault concentrated on Europe, Turkey, and South America. The
production side followed a similar pattern. On a global basis, the two
companies held just more than a nine percent market share, which would
position the combination number four in the worldwide auto industry.

As part of the agreement, Renault pumped US$5.4 billion into cash-

hungry Nissan in exchange for a 37 percent stake in Nissan Motor and a
22.5 percent stake (later raised to 26 percent) in Nissan Diesel Motor Co., a
heavy truck unit. Although it did not secure complete control of Nissan,
Renault gained veto power over capital expenditures and installed Carlos
Ghosn (rhymes with 'bone') as Nissan's chief operating officer (he became
president as well in 2000). The Brazilian-born Ghosn was an executive vice-
president at Renault and had engineered a rapid turnaround there after
joining the company in 1996. French newspapers tagged him with the
nickname 'le cost killer' because of his tenacious approach to cost cutting--
his Renault restructuring slashed US$3.5 billion in costs over a three-year
period.

The capital injection from Renault quickly reduced Nissan's debt load
to ¥1.4 trillion (US$13 billion). Ghosn rapidly began implementing a massive
restructuring of Nissan. Nonautomotive operations began to be divested,
including mobile and car telephone operations and the aerospace division.
Nissan's forklift unit was likely to be sold and Nissan Diesel was a candidate
for sale as well, given that Nissan Motor had declared that making cars and
light trucks was its core business. In early 2000 Nissan sold a stake it held in
Fuji Heavy Industries Ltd. As for the automotive operations, Ghosn in
October 1999 laid out a tough cost-containment program slated to be
completed by 2002. The program included: a 14 percent workforce
reduction--representing 21,000 jobs, primarily in Japan--through attrition,
early retirement, and noncore business spinoffs; the closure of five
production plants in Japan in 2001 and 2002; the slashing of ¥1 trillion
(US$9.5 billion) in annual costs, including a 20 percent reduction in
purchasing costs and a 20 percent cut in overhead, the latter to include the
elimination of one-fifth of Japanese Nissan dealers; and a 50 percent
reduction in debt, to ¥700 billion (US$6.5 billion). Ghosn also began tackling
the crucial need for a revitalization of Nissan's bland line of vehicles by
substantially increasing capital spending, toward a goal of speeding new
products to market four times faster than before. Although such a
restructuring was by this time routine in the United States and becoming
more commonplace in Europe, Ghosn's plan ran counter to many established
business practices in Japan. The biggest question was whether Ghosn could
implement the plan without resorting to large-scale layoffs in Japan, which
would likely face fierce opposition from workers and labor unions and even
from leaders of other Japanese firms. Perhaps to underscore the seriousness
of his mission and his determination to turn Nissan around, Ghosn also
announced that he would resign if Nissan was not profitable by March 2001.

Principal Subsidiaries:

Autech Japan, Inc.; JATCO Corporation; NDC Co., Ltd.; Nissan Altia
Co., Ltd.; Nissan Car Leasing Co., Ltd.; Nissan Finance Co., Ltd.; Nissan Koe
Co., Ltd.; Nissan Kohki Co., Ltd.; Nissan Motor Car Carrier Co., Ltd.; Nissan
Texsys Co., Ltd.; Nissan Trading Co., Ltd.; Nissan Transport Co., Ltd.;
Rhythm Corporation; Tachi-S Co., Ltd.; Tennex Co., Ltd.; Vantec
Corporation; Nissan Sunny Tokyo Motor Sales Co., Ltd.; Nissan Prince Tokyo
Motor Sales Co., Ltd.; Tokyo Nissan Motor Sales Co.; Aichi Nissan Motor Co.,
Ltd.; Nissan Capital of America, Inc. (U.S.A.); Nissan CR Corporation
(U.S.A.); Nissan Design International, Inc. (U.S.A.); Nissan Finance of
America, Inc. (U.S.A.); Nissan Forklift Corporation, North America (U.S.A.);
Nissan Motor Acceptance Corporation (U.S.A.); Nissan Motor Corporation in
Guam; Nissan Motor Corporation in Hawaii, Ltd. (U.S.A.); Nissan North
America, Inc. (U.S.A.); Nissan Research & Development, Inc. (U.S.A.);
Nissan Textile Machinery Corporation in U.S.A.; Nissan Canada, Inc.; Nissan
Canada Finance, Inc.; Nissan Mexicana, S.A. de C.V. (Mexico); Nissan
European Technology Centre Ltd. (U.K.); Nissan International Finance
(Europe) PLC (U.K.); Nissan Motor (GB) Ltd. (U.K.); Nissan Motor
Manufacturing (UK) Ltd.; Nissan Europe N.V. (Netherlands); Nissan Finance,
B.V. (Netherlands); Nissan International Finance (Netherlands) B.V.; Nissan
Motor Netherland B.V.; Nissan France S.A.; Nissan Bank GmbH (Germany);
Nissan Design Europe GmbH (Germany); Nissan Motor (Schweiz) AG
(Switzerland); Nissan Motor Iberica, S.A. (Spain); Nissan Financiacion, S.A.
(Spain); Nissan Motor España, S.A. (Spain); Nissan European Technology
Centre España, S.A. (Spain); Nissan Italia S.p.A. (Italy); Nissan Finanziaria
S.p.A. (Italy); Nissan Motor Co. (Australia) Pty, Ltd.; Nissan Datsun Holdings
Ltd. (New Zealand); Nissan Middle East F.Z.E. (United Arab Emirates);
Nissan Motor (China) Ltd.

Principal Competitors:

Bayerische Motoren Werke AG; DaimlerChrysler AG; Fiat S.p.A.; Ford

Motor Company; Fuji Heavy Industries Ltd.; General Electric Company;
General Motors Corporation; Honda Motor Co., Ltd.; Hyundai Group; Isuzu
Motors Limited; Kia Motors Co., Ltd.; Mazda Motor Corporation; Mitsubishi
Group; Outboard Marine Corporation; PSA Peugeot CitroenS.A.; Saab
Automobile AB; Suzuki Motor Corporation; Toyota Motor Corporation;
Volkswagen AG; AB Volvo; Yamaha Corporation.

V. Mission, Vision, Goals and Objectives

MISSION
 Nissan provides unique and innovative automotive products and services
that deliver superior measureable values to all stakeholders in alliance with
Renault.

Our Mission represents the roles that Nissan should play when pursuing its
aim. It clearly expresses that the core business of Nissan lies in automobiles
and related servicing functions and promises to provide all stakeholders with
relevant values. It also promises to continue to offer highly innovative
solutions full of originality. The cooperation with Renault provides us with
unique opportunities for sustainable growth.

VISION

At Nissan Australia we strive to enrich our customers' lives; we are driven

by success; we are energised by the future. Our vision statement is more
than just a phrase or tagline. It represents the long-term direction of the
company and it signifies the existence of Nissan. It is a living, breathing
philosophy that we deliver to all Nissan stakeholders - customers,
shareholders, dealers and employees.

OBJECTIVES

Nissan aims to achieve sustainable, profitable growth. At the same

time, we desire to make enduring contributions to social development as a
valued and trusted member of society. Under Nissan's corporate vision of
"enriching people's lives", we always think what we can do to realize
people's enriching life, and make social contributions continuously in the
three main areas of "supporting education", "taking care of environment",
and "providing humanitarian relief when necessary".

In our social contribution activities at Nissan, we place great importance on

the following three points:

1. Fostering a spirit of voluntary participation among employees

We do our best to support the social contribution activities carried out by
individual employees and we encourage as many of our people as
possible to get involved in the spirit of corporate citizenship, with the
aim of contributing as much as possible to society through such
activities.
2. Making the best use of our corporate strengths and qualities
Some of our contributions are financial in nature, but we also aim to go
beyond this by making full use of the resources built up through our
business activities, such as our expertise and our facilities, to carry out
sustainable activities.
3. Cooperating with specialized NPOs and NGOs
Nissan continually looks for ways to develop highly specialized programs
to work with nonprofit and nongovernmental organizations in order to
make its social contributions all the more effective and productive.

GOALS
 VI. SWOT ANALYSIS

Strengths

1. Successful Renault-Nissan alliance

2. Effective R&D spending resulting into the best-selling electric vehicle in
the world
3. Strong presence in the leading and emerging automotive markets
4. Well-managed company’s operations

Weaknesses
1. Poor marketing and advertising capabilities resulting in poor brand
awareness
2. Massive product recalls in the U.S.

Opportunities
1. Increasing government regulations
2. Improving U.S. economy
3. Timing and frequency of new model releases

Threats
1. Increased competition
2. Rising Japanese Yen exchange rates
3. Natural disasters
4. Low fuel prices could negatively impact Leaf sales
 VII. Central Problem

Nissan Motor Co. told the transport ministry Wednesday that it will
recall an additional 38,650 cars because inspection fraud continued even
after the problem first came to light.

Nissan continued using unauthorized workers for final inspections of

finished vehicles, even though the automaker said the practice was
corrected shortly after it was discovered last month during an unannounced
inspection by the ministry.

The latest move, involving 30 models, boosted the total number of

vehicles subject to recalls related to the scandal to 1.2 million.

On Oct. 6, Nissan issued a recall of 1.16 million vehicles that were

registered before the scandal became public and had not undergone
mandatory safety checks, a move meant to check whether any defects were
overlooked.

But it turned out on Oct. 18 that Nissan’s use of unauthorized workers

continued at one of its six domestic assembly plants after the scandal first
surfaced. Later, Nissan said the misconduct continued at a total of four
factories.

Nissan has now said it will recall all vehicles that went through final
inspections at the six plants, all for the domestic market, between Sept. 20
and Oct. 18.

Subject to the latest recall are passenger cars, trucks, ambulances and
buses. The measure covers 23 Nissan models, including the Note
subcompact and Serena minivan, and seven models supplied to other
companies.

Nissan will inspect recalled vehicles at state-designated plants.

 VIII. Alternative Course of Action

Nissan cut its net profit outlook for the year ending March 2014 by
nearly 20 percent to 355 billion yen ($3.62 billion), depressed by a sales
slowdown in China and Southeast Asia and by a major vehicle recall it
announced in September.

Ghosn will attend an earnings briefing at Nissan’s headquarters in

Yokohama from 5:30 p.m. (12.30 p.m. EDT).

“Our new management line-up and regional organization will ensure

the company has the executive team in place to deliver the profitable growth
expected from the Nissan Power 88 mid-term plan,” he said in a statement,
referring to its expansion goals.

To focus better on issues unique to each region, Nissan said it will

also increase its number of regions to six from the current three. Among the
changes, China will become an autonomous region and the Americas will be
split into North and South Americas.

Nissan has been showing signs of quality issues as it rapidly

expands, conducting a series of recalls including one in September targeting
nearly 1 million vehicles due to an accelerator sensor flaw.

Nissan’s makeover follows a similar shakeup at alliance partner

Renault SA’s (RENA.PA).

Nissan did not name a new COO, saying the responsibilities would be
shared among three executives.

Hiroto Saikawa will become Nissan’s de facto No.2, staying on as

Chief Competitive Officer to oversee areas including R&D, purchasing,
manufacturing and the supply chain, Nissan said.

Executive Vice President Andy Palmer will become Chief Planning

Officer, a new post overseeing global sales. Executive Vice President Trevor
Mann will become Chief Performance Officer responsible for running regional
operations, Nissan said.
 IX. Recommendation

I probably recommend that the Officers who are also chained with the

issue facing by the Nissan Motors Company must be descended into their

places. Because when they continue managing and doing such negative

things, the company will face big issues in terms of finance and it will also

lead to the fall of their company. There will be also sales slowdown that will

occur due to the corruption that still exists in the company.

And also the vehicles that has been released but unregistered must

be returned to the company and will also pass through different inspections.

These cars said that also have issues and has quality control by the

Japanese constructions.

In spite of these issues Nissan company must continue their

production of good, high quality and eco- friendly cars that still patronized

by many buyers and even commuters around the world.

X. Corporate Social Responsibility

“BLUE CITIZENSHIP”
 In addition to providing the obvious benefit of growth with sustainable
profits, Nissan seeks to contribute to the sustainable development of society.
To this end, we listen carefully to the wide variety of our stakeholders,
working with them as we pursue activities that meet society's needs.

SUSTAINABILITY

A sustainable life with vehicles while preserving our beautiful planet:

Nissan's environmental philosophy is "a symbiosis of people, vehicles and
nature." We tackle environmental issues by reducing CO2 emissions and
addressing limitations in the natural resources we use as we seek to create a
sustainable mobility society with minimal impact on the environment. We are
pursuing this mission through our innovative vehicles and the new lifestyles
we propose.

MOBILITY

Nissan's safety concept-"Vehicles that help protect people":

Through its vehicles, Nissan seeks to provide the "pleasure and richness of
driving" with the highest priority on safety and customers' peace of mind.
Our ultimate goal is a world with virtually no deaths of serious injuries from
accidents involving Nissan vehicles. In addition to our work on safety
technologies, we aim for deeper trust and high satisfaction among all our
customers.
COMMUNITY

Toward a society with richness for all: As a member of the global

community, Nissan aims to help create a society where all people can enjoy
the richness it provides. We contribute to society in ways that only an
automaker can, fostering participatory consciousness among our employees
and working together with NPOs and NGOs in activities that meet local
conditions and need in countries and regions around the globe.

CORPORATE SOCIAL RESPONSIBILITY

Here are some examples of the things we're up to: We've been
working tirelessly to reduce CO2 emissions in all our business endeavours,
including manufacturing and shipping. Also, have a look at the Nissan LEAF!
In 1995, we set a goal to half the number of deaths and serious injuries in
traffic accidents involving Nissan vehicles by 2015. We achieved this in 2009
in Japan and the United Kingdom, and are making huge strides in all our
markets.

We foster participatory consciousness among our employees and

work with NPOs and NGOs to meet local needs in countries around the
globe.