Nissan's New Midterm Plan: aims for a global market share of 8% and operating profit of 8% in FY2016
Acquires Russia's AvtoVAZ jointly with Renault, builds a 200,000-unit plant in Brazil
On June 27, 2011, Nissan announced "Nissan Power 88" a six-year medium-term plan covering FY2011 through FY2016 in which Nissan is determined to achieve a global market share of 8% and a corporate operating profit of 8% in fiscal 2016. If these goals are met, Nissan's global vehicle sales will increase by three million vehicles in six years to over 7.2 million units.
Nissan disclosed how it will go about increasing sales quantities efficiently by making company-wide efforts in a bid to gain market share, sales quantities and operating profit at the same time.
According to the plan, the increase in sales will come mainly from emerging countries including BRICs and the five ASEAN member countries. Nissan will acquire AvtoVAZ, an auto leader in Russia, jointly with Renault and will build a plant in Brazil with an annual capacity of 200,000 units. Nissan will increase production capacity in China toward a market share of 10%. Nissan will also increase production in North America including Mexico to the 1.7 million-unit mark as it sees room for further recovery of the U.S. market.
Nissan will increase sales of the highly efficient V-platform models to more than 1 million units and also introduce price-entry segment in those markets. Nissan has constructed strategic partnerships with AvtoVAZ in Russia, Ashok-Leyland in India, and Daimler and others in advanced countries. According to Nissan, these partnerships are supportive of Nissan's competitiveness.
Nissan will launch a total of 51 new models during the six years. At the same time, Nissan will eliminate 13 existing models so that Nissan will have 66 models in fiscal 2016, only 2 more than what the company had in fiscal 2010. This follows the company's policy to improve sales efficiency by increasing the sales quantity per body type from 55,000 units in fiscal 2007 to 150,000 units.
With regards to costs, Nissan will reduce total costs from research and development to vehicle transportation by 5% each year. To avoid the effect of foreign exchange, Nissan will promote the use of LCC parts and reduce the yen-based costs from 1,800 billion yen in fiscal 2011 to only 800 billion yen in fiscal 2016.
Nissan will split the Kyushu Plant to suppress labor costs and increase procurement of parts from Asian suppliers. As a result, over 50% of Nissan's domestic production will be centralized in Kyushu to maintain domestic production of one million vehicles.
Sunny Sedan launched in China in January 2011
(the second model in the V-platform based family; marketed in 170 countries in the world
including North America where the car was introduced as the Versa Sedan)
Goals and backgrounds of Nissan's New Midterm Plan "Nissan Power 88"
|Global market share||Nissan is determined to win a global market share of 8% by fiscal 2016 (5.8% in fiscal 2010). The company has not announced its goal with regard to sales quantity but anticipates that the global demand in fiscal 2016 will be over 90 million units. A global share of 8% equals 7.2 million units, 3 million units more than 4.19 million units sold in fiscal 2010.|
|Nissan will aspire for a sustainable operating profit of 8% (6.1% in fiscal 2010). On top of increasing the vehicle sales quantity that would contribute to increasing an operating profit, Nissan will offset the cost increases and increased fixed costs arising from external factors with yearly cost reductions.|
|Source: Nissan New Midterm Plan (2011.6.27)|
|(Notes) 1.||Renault-Nissan Alliance has expressed intention to acquire over 50% ownership of AvtoVAZ's in Russia and announced that its global vehicle sales quantity in 2010 was 7,276,398 units including 570,000 units of AvtoVAZ's "LADA" brand vehicles. This means the alliance has exceeded VW (7,203,000 units in 2010) and risen to third place in the world in 2010.|
|2.||The total global demand in fiscal 2007 was split between advanced markets at 60% and emerging markets at 40%. Nissan predicts, however, that the ratios would be reversed in fiscal 2016 to 40% and 60%. The growth targeted in the new midterm plan is to take place primarily in emerging markets and Nissan will increase production capacities in those areas.|
|3.||The exchange rate during the new midterm plan period is set to 80 yen to the dollar in fiscal 2011 and 85 yen in fiscal 2012-2016.|
|4.||According to Nissan President Carlos Ghosn, "Nissan Power 88" is Nissan's first midterm business plan that is given a free start since he took office and the company has all the necessary cash reserves, technologies and product plans to take aggressive actions from the very start.|
Number of new products
|(Infiniti brand cars shown in parentheses)|
|U.S.||1 (1)||2||9 (4)||18 (5)||51 (13)|
|Source: Nissan New Midterm Plan (2011.6.27)|
|(Notes) 1.||Launching 51 models in six years dictates launching one model every six weeks to lead sales. The plan predicts that investing to increase production capacity mainly in China, North America and Brazil will support the increase in sales.|
|2.||Nissan will adopt 15 cutting-edge technologies a year, a total of 90 during the six-year period.|
Product range and segment coverage
|Product range||49 models||64 models||(+15)
Source: Nissan New Midterm Plan (2011.6.27)
(Note) The 13 models are to be eliminated in fiscal 2011-2016 by consolidating product overlaps, etc. For example, the next Quest and the next Elgrand will be consolidated into one model (both are sharing the D-platform since 2010) as will be Altima and Teana.