Nissan announces new six year business plan

Nissan seeks 8% global market share by 2016

Nissan announced a business plan referred to as Nissan Power 88 seeking 8% global market share and sustainable 8% corporate operating profit by the end of fiscal year 2016. This plan features such ambitious goals as:

• Average a new vehicle introduction every six weeks for six years
• Nissan’s global presence will offer 66 vehicles meant to address 92% of all markets and segments
• 1.5 million electric vehicle (EV) sales combined between the Nissan-Renault alliance
• New cars and light commercial vehicles developed for entry-level markets
• Introduce 90 advanced technologies, averaging 15 per year

Nissan plans to accomplish these goals by increasing global retail outlets from the current 6,000 to 7,500. By 2012 Nissan will have production capacity of 1.2 million units in China. China is Nissan’s single largest global market and they are seeking to maintain or grow that market. Nissan plans to increase their presence in Brazil, Russia and India along with other emerging markets. The Infiniti brand is also set to expand significantly, ultimately offering at least 10 vehicles.

Much of this could have been anticipated from Mr. Ghosn’s speech to the Stanford Institute for Economic Policy Research. Our only concern from the consumer perspective is this – is Nissan trying to follow too closely the lead established by Toyota of pursuing market share – which for Toyota came at the cost of product quality. Toyota’s focus on share resulted in a reduction of focus on quality – which has ultimately resulted in a tarnished image of a once almost untouchable brand. Nissan’s quality image, while good, is not at the level that Toyota’s once was. Nissan can ill afford to toy with a brand that, while rising, is not recognized as among the best in the industry.

One point that we did take from this announcement was Nissan’s intent to focus on the overall customer experience to elevate its brands’ power and sales. Based on our observations of the early LEAF reservation and delivery process, Nissan must work harder to achieve this goal.