Nissan Charts Course for Global Turnaround Centered on U.S. Product Onslaught
12 January 1999
Nissan Charts Course for Global Turnaround Centered on U.S. Product Onslaught
North American President Says It Must Return to Roots
of Engineering Leadership
DETROIT, Jan. 11 -- Speaking today at the annual Automotive
News World Congress (ANWC), Minoru Nakamura, president and CEO of Nissan North
America, Inc., gave a candid review of the company's past and current
challenges, while outlining how the company will turnaround. An onslaught of
new product, improved brand value and a renewed focus on what Nissan was built
on -- leadership in quality engineering -- will help Nissan rebuild its image
in North America, according to Nakamura.
"When we first came to the United States 40 years ago," said Nakamura, "we
were thought of as the company where engineering was most important, and cars
were built to last. We still build that way, but we're not thought of that
way."
Nakamura continued by saying Nissan will get that image back, through an
aggressive, thought-provoking product lineup and smart business decisions.
"We want to be known as the Japanese car company with an attitude."
Goodbye "Stupid Stick" ... Hello "Smart Stick"
The company, whose own spokesperson recently acknowledged it was hit with
a "stupid stick" a few years ago, admits that it made some grave and costly
errors like miscalculating residual lease values and executing a brand
campaign that didn't improve sales. During his ANWC speech, Nakamura
ceremoniously pulled out a wooden "stupid stick" and broke it, stating that
the company changed direction last year when it set a strategy to get "back to
basics" in the way Nissan makes and sells cars.
Nakamura went on to pull out what he called a "smart stick," brandishing a
conductor's baton that he said has been used to orchestrate the company's
quest to get "back to basics." This strategy required Nissan to set some
lofty objectives, many of which, Nakamura pointed out the company has already
achieved, or has made great progress toward completing:
-- Worldwide, Nissan has nearly reached its fiscal year debt reduction
goal of $3.4 billion; by the fiscal year ending March 2001, Nissan
expects to reduce debt another $8.5 billion.
-- NNA reached its goal of reducing new inventory by 100,000 in only six
months, rather than the 12 months it anticipated.
-- NNA reduced its used inventory to below 14,000, a highly manageable and
efficient volume.
-- NNA achieved its goal for captive lease penetration, reducing it from
around 35 percent to 15 percent.
-- Globally, Nissan has begun implementing an aggressive platform
reduction plan, targeting a total of five platforms by 2005, from 25 in
1997. The first of these global platforms, the Sunny, was introduced
in Japan last October.
-- To improve profitability for dealers and Nissan, it set a goal to
reduce costs by $1,000 per vehicle at Nissan Motor Manufacturing
Corporation (NMMC), its manufacturing plant in Tennessee. The company
is on schedule to meet that goal, while maintaining the high quality
standards for which it is known.
U.S. Product Design Appeals to U.S. Market
Beyond reaching its operational and business objectives, Nakamura
acknowledged that Nissan's North American design studio (Nissan Design
International) must -- and will -- play a vital role in developing products
for the U.S. marketplace. "Creating the right cars for the American market is
a top global priority for Nissan," said Nakamura.
In fact, Nissan Design International (NDI) is responsible for the design
of Nissan's all-new Xterra SUV, the 2000 Maxima, and Sentra, as well as two
exciting new concept vehicles -- the Sport Utility Truck, or SUT, and the new
"Z," which Nissan is strongly considering for a comeback. The Xterra, SUT and
Z were debuted at the 1999 North American International Auto Show.
Nakamura also reassured the audience that Nissan is well-positioned to
develop and market many new products. "To allow us to develop and market this
new product, we have built up our cash reserve to around $3.4 billion," he
said. The cash reserve alone is more than enough to handle Nissan's product
plans, he added, but the lines of credit allow Nissan some additional
financial flexibility.
Merging in North America ... Merging Globally
Another step in Nissan's effort to get "back to basics" was the Jan. 1,
1999 consolidation of its two North American operations -- Nissan North
America and Nissan Motor Corporation, U.S.A. -- forming one company called
Nissan North America, Inc. "Consolidation of the two companies allows us to
be more market-oriented and quickly respond to market demands. In short, we
can make quicker decisions and be more competitive in the U.S.," Nakamura
added.
Looking at global mergers and partnerships in the automotive industry,
Nakamura cautioned that manufacturers must not forget that there are
differences between countries, and that these differences must be recognized
and respected.
"There are special characteristics of cars in each of those countries,"
Nakamura said. "We in the industry, as well as car owners, appreciate those
characteristics. They should not be homogenized out of existence, especially
as we in the industry make our alliances."
Nissan in North America
In North America, Nissan's operations include styling, engineering,
manufacturing, sales, consumer and corporate finance, and industrial textile
equipment. Nissan in North America employs more than 20,000 people in the
United States, Canada and Mexico, and generates more than 70,000 jobs through
more than 1,500 Nissan and Infiniti dealerships across the continent. More
information about Nissan North America, Inc. and the complete line of Nissan
and Infiniti vehicles can be found on-line at http://www.nissan-na.com.