12 Success Lead Change Append 2 Nissan

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12 Success Lead Change Append 2 Nissan

  1. 1. Nissan Motor Co., Ltd
  2. 2. Share of Sales by the World Car Market 2001
  3. 3. Net Sales (1990-2002) (Billions of yen) (Year)
  4. 4. Ordinary Income (1990-2002)
  5. 5. Introduction
  6. 6. Company Name : Nissan Motor Company Highlights Paid in Capital :604.6 (billions of Yen) Employees : 125,099 Establishment : Dec, 1933 Representative : Carlos GHOSN Global Retail Sales : 2,596,530 (units)
  7. 7. Financial Highlights (2001) Operating Margin : 7.9% Net Sales $ 51.6b Ordinary Income $3.5 Operating Income $ 3.1 Net Income $3.1 R&D Investments $2.2
  8. 8. Capital alliance of Japanese makers GM ( US ) Isuzu 12.0 % Suzuki 20.0 % Fuji Heavy Industries 20.0 % Ford ( US ) Mazda 33.3 % Renault ( FRA ) Nissan Motor 44.4 % DC ( US&GER ) Mitsubishi Motors 37.3 % Opel ( GER ) Fiat ( ITA ) Land Rover ( UK ) Jaguar ( UK ) Volvo ( SWE )
  9. 9. Nissan Motor Co. Net sales & ordinary income
  10. 10. Net Debt (Automotive Business) (Year)
  11. 11. Vision / Mission Vision Mission Nissan : Enriching People’s lives Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders* in alliance with Renault. * Our stakeholders include customers, shareholders, employees, dealers, suppliers, as well as the communities where we work and operate.
  12. 12. History
  13. 13. Major Events in Nissan’s History -1 <ul><li>(1933) Jidosha Seizo Co., Ltd., predecessor of Nissan Motor Co., Ltd., is established in Yokohama. </li></ul><ul><li>(1935)The first car manufactured by a fully integrated assembly system rolls off the line at the Yokohama Plant. </li></ul>
  14. 14. Major Events in Nissan’s History -2 <ul><li>(1960)Nissan wins the 10th Annual Deming Prize for excellence in industrial engineering. </li></ul><ul><li>(1972)Cumulative domestic production surpasses 10 million units. </li></ul><ul><li>(1980)Cumulative exports surpasses 10 million units. </li></ul><ul><li>(1980)Nissan Motor Manufacturing Corporation U.S.A. (NMMC) is established. </li></ul><ul><li>(1984)Nissan Motor Manufacturing (UK) Ltd. is established . </li></ul>
  15. 15. Major Events in Nissan’s History -3 <ul><li>(1988)Nissan European Technology Centre Ltd. is established in UK. </li></ul><ul><li>(1990)Cumulative production surpasses 50 million units. </li></ul><ul><li>(1994)Nissan Middle East FZE is established in Dubai, UAE. </li></ul><ul><li>(1995)Vehicle production at the Zama Plant ceases. </li></ul>
  16. 16. Major Events in Nissan’s History -4 <ul><li>(1999)Nissan and Renault signs an agreement for global alliance, including equity participation. </li></ul><ul><li>(1999)The company announces the Nissan Revival Plan (NRP). </li></ul><ul><li>(2002)The company announces new three-year business plan NISSAN 180. </li></ul>
  17. 17. Renault
  18. 18. Renault Financial Highlights (2001) Operating Margin E 473 Revenues (euro million) E 36,351   Operating Income E 704 Renault net Income E 1,051 Investment E 3,314 Total workforce (number of persons) : 140,417
  19. 19. Renault’s revenues (1997-2001)
  20. 20. Nissan Revival Plan
  21. 21. Carlos, GHOSN ・ Born in Brazil (March,9,1954) <Education> ・ Graduated from E´cole Polytechnique ・ Graduated from E´cole des Mines <Experience> ・ (1978) Ghosn is hired Michelin ・ (1985) became COO of Michelin Brazil ・ (1989) became COO of Michelin North America ・ (1996) became Executive Vice President of Renault    ・ (1999) became Chief Operating Officer of Nissan motor ・ (2000) became chairman and COO of Nissan Motor ・ (2001) became chairman and CEO of Nissan Motor
  22. 22. Nissan Revival Plan <ul><li>First announced in October of 1999, Nissan Revival Plan (NRP) went into action in April, 2000. </li></ul><ul><li>When the NRP was first announced, Nissan’s executive committee announced three bold commitments. </li></ul><ul><li>If any of these were not met, the executive committee members promised to resign. </li></ul>
  23. 23. NRP’s Objective <ul><li>The objective is to free resources from non-strategic, non-core assets and investment more in our core business - cars - while at the same significantly reducing Nissan’s debt. </li></ul>“ The aim is to grow the company, not shrink it.” said Ghosn.
  24. 24. Substance of Nissan Revival Plan Goal of Nissan Revival Plan <ul><li>Return Nissan to profitability for 2002 </li></ul><ul><li>Achieve a consolidated operating profit of 4.5% </li></ul><ul><li> of sales by 2002 </li></ul><ul><li>Reduce costs by 1 trillion Yen and net debt </li></ul><ul><li> from 1.4 trillion Yen to less than 700billion Yen </li></ul><ul><li> by 2002 </li></ul>As Results Reduce headcount :21,000 (14%) for worldwide Purchase strategy :Appropriate 200billion Yen for Reserve Fund The effect of cost redact :1 trillion Yen
  25. 25. Major Contents of NRP Enterprise development : P rofitable growth Purchase strategy : It is 20% of cost reduction in three years.                       suppliers Reduction (1,145⇒600) Production : A chievement of optimal production efficiency / the optimal cost. 30% curtailment of productive capacity Sales, General and : T o be reduced 20%   administrative costs Slimming of a operating network ( Number 20% curtailment of direct management dealers, 10% curtailment of offices, etc. ) financial cost : Strengthening financial management reduction of financial cost. Cancellation of strategic stock possession ( Stock sale of an affiliated company, etc)   R&D : Effective development of R&D capability Organization : The change to the global organization from the organization according to area  
  26. 26. Results : Attaining the NRP Goals <ul><li>Purchasing costs : reduced 20 %. </li></ul><ul><li>Plant capacity utilization : risen from 51%->75%. </li></ul><ul><li>A revamping of the domestic sales system has reduced sales and administrative costs. </li></ul><ul><li>Worldwide stuffing has been brought in accordance with needs. </li></ul><ul><li>Non-core assets have been sold. </li></ul><ul><li>A rededication to R&D has been matched by 25% increase in efficiency. </li></ul>
  27. 27. Essence of NRP 達成方法
  28. 28. What is ‘Commitment’ ? <ul><li>・ A return to net profitability in 2000. </li></ul><ul><li>・ A minimum operating income to sales margin of 4.5% by 2002. </li></ul><ul><li>・ Consolidated net automotive debt reduced to less than 700 billion ( $58 b) by 2002. </li></ul>Nissan announces NRP conclusion one year earlier than planned(2002->2001).
  29. 29. CEO (Hanawa chairman) COO (Ghosn President) Executive committee Planning Domestic sales Oversea sales R&D Produc -tion Purchase Admin. Europe Others North America 1. Growth of business ( 50 ) 2.Purchase ( 12 ) 3.Production ( 10 ) 4.R&D ( 13 ) 5.Marketing ( 10 ) 6.General admin. ( 10 ) 7.Finance & cost ( 12 ) 8.Cut of the model ( 13 ) 9.Org. & decision ( 12 ) The name of CFT (members) Structure of Cross Functional Team ○ (1) ○ (1) ◎ (4) ○ (1) ○ (1) ○ (2) ○ (1) ○ (1) ○ (1) ○ (1) ○ (2) ○ (5) ○ (2) ◎ (2) ○ (2) ○ (3) ◎ (4) ○ (3) ○ (1) ○ (1) ◎ (5) ○ (1) ○ (1) ○ (1) ○ (2) ○ (2) ○ (1) ◎ (1) ○ (4) ○ (1) ○ (1) ○ (1) ◎ (9) ○ (1) ○ (1) ◎ (6) ○ (1) ○ (1) ○ (1) ○ (1) ○ (1) ◎ (4) ○ (1) ○ (3) ○ (2) ○ (2) ○ (1) ○ (3) ○ (2) *
  30. 30. Investment for the Future <ul><li>With an additional 1,000 engineers being added to Nissan’s technical team. </li></ul><ul><li>Massive investments in R&D ( to 4.5% of revenues). </li></ul><ul><li>Investments in capital expenditures ( to 5.5% revenues). </li></ul>Building Competitive Advantages
  31. 31. New Cars after NRP Japan & Europe SKYLINE Japan & North America Terano Japan, Europe & North America Cefiro Japan & North America FAIRLADY- Z Japan Larel Japan & Europe March 2002, Apr. Japan STAGEA Oct. Japan & North America XVL Mar. Japan & Europe PRIMERA Feb. Japan & North America CIMA 2001, Jan. Sales’ market model Market launching
  32. 32. New Strategy (NISSAN180) Nissan will sell one million additional units worldwide by fiscal year 2004. Nissan will realize an eight % operating margin under constant accounting standards. Nissan will achieve Zero net automotive debt by the end of 2004. 1 8 0
  33. 33. Renewal <March> $10 $11 Price (in Japanese Market,$000) 1,525 mm 1,425 mm Height 1,660 mm 1,585 mm Width 3,695 mm 3,720 mm Length 1.4 Litter 1.3 Litter Engine Displacement 5-persons 5-persons Seating Capacity Front Front Driving Wheel New-MARCH March
  34. 34. Renewal< > $30 $38 Price (in Japanese Market,$000) 1,315 mm 1,255 mm Height 1,815 mm 1,800 mm Width 4,310 mm 4,520 mm Length 3.5 Litter 3.0 Litter Engine Displacement 2-persons 2-persons Seating Capacity Rear Rear Driving Wheel New-Z Z
  35. 35. Four Pillars of N 180 <ul><li>Generating more revenue. </li></ul><ul><li>Reducing costs. </li></ul><ul><li>Increasing both quality and speed. </li></ul><ul><li>Maximizing the Alliance with Renault. </li></ul>NISSAN 180 Ready and Positioned for Growth
  36. 36. The NISSAN180 goal <ul><li>One million additional units will be sold by the fiscal year 2004 (October 2004 to September 2005). </li></ul>Japan : +300,000 unit US : +300,000 Europe:+300,000 Other markets+300,000 Global Total Market Share Targets: 5.1%
  37. 37. Building the Brand <ul><li>28 all-new products will be launched in all segments, all over the world. </li></ul><ul><li>Company executives set the goal of placing at least three Nissan cars in Japan’s top-ten monthly best-selling lists. </li></ul><ul><li>Nissan’s new brand identity : based on the traditions of technology, imagination and passion. </li></ul>
  38. 38. Strengthen Designing Power <ul><li>Nissan Design Europe will play a strategically important role in Nissan’s creative network. </li></ul><ul><li>Nissan Design Europe will be home to around 50 international designers, modellers and support staff. </li></ul><ul><li>Nissan Design Europe has increased its staff by 25%, a further indication of the importance of the studio to Nissan’s global design operations. </li></ul>“ Design is fundamental at Nissan. Most importantly it is a key driver behind NISSAN 180, our global growth plan.” said Carlos Ghosn.
  39. 39. Summary Nissan New Business Structure and Model <ul><li>Cross Functional team </li></ul><ul><li>Restructuring </li></ul><ul><li>Cut costs + reinvestment </li></ul><ul><ul><li>New Engineers </li></ul></ul><ul><ul><li>Massive R & D investment </li></ul></ul><ul><li>Restructure to permit Quality and Speed </li></ul><ul><li>Alliance with Renault </li></ul>
  40. 40. Summary Nissan New Business Structure and Model <ul><li>The New Model of Nissan…. </li></ul><ul><ul><li>Nissan 180 </li></ul></ul>
  41. 41. New Strategy (NISSAN180) Nissan will sell one million additional units worldwide by fiscal year 2004. Nissan will realize an eight % operating margin under constant accounting standards. Nissan will achieve Zero net automotive debt by the end of 2004. 1 8 0
  42. 46. Understanding the degree of change required 1.1b Gerry J Gannon Institute for International Research                                                            
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