Follow up with the current industry’s trend to produce friendly, fuel-efficient gas-powered vehicles; Nissan is putting more effort into its R&D, as well as its engine segment in order to gain an optimal mass-market sale of affordable fuel-efficient cars- what would help the company to continue competing efficiently. Besides the traditional products, the company is recommended to pay thorough attention to developments of electric cars, which is seen as the future of the industry. By introducing Nissan LEAF –the first mass-market priced total-electric car in 2010 in the world, Nissan displayed its clear direction going forward: “SHIFT_the way you move”

1. Duong Le
Nissan Motors: leading toward “green” transformation
NISSAN MOTORS’ EXECUTIVE SUMMARY
Nissan Motor Company Ltd. is a Japanese-based multinational automaker. It was a core member of
the Nissan Group. Under the total downsizing and restructuring process started in late 1990s that was
orchestrated by the firm’s current CEO - Nissan Motor has become more independent from Nissan Group.
Nissan was the sixth largest automaker in the world behind Toyota, General Motors, Volkswagen
AG, Hyundai Motor Group, and Ford in 2010. In 1999, the company made its well-known two way alliance with
France-based Nissan Renault S.A., which observe the acquisition of 43.4% total shares of Nissan by Renault, while
Nissan, in turn, holds 15% of Renault shares, as of 2008. Alongside the normal range of Nissan-branded cars, the
company also produces the upscale models branded Infiniti.
As being a big player within the competitive automobile industry, Nissan possesses all required
capabilities to overcome market’s threats, as well as utilize potential opportunities to stay strong in the
automotive race. It operates factories in 18 countries, selling 4.7 million passenger cars and commercial vehicles
worldwide in 2011. Out of the total 36 automakers selling cars in the U.S in 2011, Nissan came fifth in total cars
sold, accounted for almost 950 thousand units – up 17.3% from the previous year. The company is aiming to
further increase its global market-shares in the coming years.
Follow up with the current industry’s trend to produce friendly, fuel-efficient gas-powered vehicles;
Nissan is putting more effort into its R&D, as well as its engine segment in order to gain an optimal mass-market
sale of affordable fuel-efficient cars- what would help the company to continue competing efficiently. Besides the
traditional products, the company is recommended to pay thorough attention to developments of electric cars,
which is seen as the future of the industry. By introducing Nissan LEAF –the first mass-market priced total-electric
car in 2010 in the world, Nissan displayed its clear direction going forward: “SHIFT_the way you move” (Nissan’s
mission statement).
Even though there are issues over the uncertainties of the new segment for environment-friendly vehicles
that Nissan is pursuing, the company has what it takes to be successful: strategic and financial core competencies.

2. NISSAN MOTOR: LEADING TOWARD “GREEN” TRANSFORMATION
Over the last decade, there have been growing issues on protecting the environment. Politics and
governments have conducted laws and incentives to reduce pollutions from all perspectives. This fact certainly
influences how corporations would run their business. Within the automobile industry, automakers have to come
up with constant product innovation strategies to meet both legal and social demands. Nissan Motors- the six
largest automaker in the world, also perceives the importance of innovation. The company does even better: it
leads the way towards producing price-competitive zero-emission vehicles by successfully introducing the LEAF –
Nissan’s first all-electric car in 2010 in Japan. While the current market seems to be flooded with the amount of
fuel-powered models produced by dozens of automaker brands, Nissan is trying to be the first one getting out of
the crowd to walk its new way to the future. Considered by many to be a pragmatic approach, the company’s
strategy still involves potential issues that required extensive evaluation and analysis.
The global automobile industry is undoubtedly one of the largest elements of the world’s economy. Since
its so-called inception in the 1930s with Henry Ford’s mass production techniques of making assembly affordable
vehicles to serve the society, the automobile industry has marked its significance, changing the way the world
operates itself. Throughout its history, the industry observed tremendous technological shifts in how a vehicle
would be produced to satisfy its contemporary period. Nissan’s recent efforts of introducing mass-market zeroemission car- if successful - would showcase yet another disruptive change.
Nonetheless, to become the first mover of producing electric vehicles, Nissan will have to face
tremendous uncertainties. First of all, given the requirements implementing battery production and public
charging stations system – the two fundamental components making electric car a practical vehicle, Nissan will
have to reserve a lump-sum amount of capitals for its Research and Development. Secondly, provided the ongoing
efforts and successes of automakers to produce better conventional fuel-efficient cars, there presents a big
challenge for Nissan on how to feature its product to lure customers. Finally, once Nissan was able to resolve
those issues, there will be other concerns over the strategic ways the firm could market its sales of the electric
vehicles, making the cars mass-market efforts, and not just niche cars – as predicted by Nissan’s CEO Carlos Ghosn.
Putting things short, the questions to ask include: Does Nissan possess all required capabilities to take on their
zero-emission mass-market effort or should they just stay committed to their current operation system? Is it

3. practical for Nissan’s electric car approach to be profitable? If yes, how would they market the product to their
customers to achieve optimal sales and profit?
In order to analyze the above issues sufficiently, it is necessary to evaluate Nissan Motor’s internal
strengths and weaknesses, as well as the potential external factors including opportunities and threats that are
potentially influential to the company’s business.
Perhaps the most prominent strength that Nissan has acquired over its entire appearance in the market is
its global brand. The name Nissan has become familiar to all car drivers in the world, for the fact that Nissan
markets its products in over 190 countries. Brand strength provides Nissan a significant competitive advantage
that can offset the current extreme level of market competition. Along with the qualitative strength, Nissan also
displays promising quantitative capabilities shown by the company’s financial information. Exhibit 1 and Exhibit 2
on the company’s Consolidated Income Statement and Financial Highlights (Nissan Global 2011) shows the
company business is getting back to the sucessful trend after the horrendous economic crisis in 2008. The fiscal
year ended March 2011 observed a significant increase in operating income of 72.5% from the previous fiscal year,
accounted for the total operating income of approxiamted 540 billion yens – equivalent to approxiamtely 6.7
billion US dollars. Returns on Equity of the same fiscal year showed 11.3%, which is getting closer to its peak in
2007 of 13.68%. Nissan’s strategic cooperative business by Nissan’s joint venture with Renault since 1999 adds yet
another strength to the portfolio. The alliance has so far provided great advantages for both partners with higher
market coverage, faster penetration, sharing of common platforms; conponents; and engines. Regarding Nissan’s
current dedication for zero-emmision vehicles, it would have been extremely difficult for the company to build and
mass market the electric car without each other.
Nissan’s highlighted weaknesses that were addressed in recent years are the overseas over-dependencies
and product innovation lag in the U.S. market. The fomer weakness is due to the fact that Nissan has been
producing more vehicles abroad than at home in Japan, and as a consequence, has been generating more
operating income internationally than domestically. Some could debate that this issue is caused by the
globalization force that Nissan cannot advoid. Nevertheless, being increasingly dependent on overseas markets
impose the risks associated with foreigness-status threats including different government policies or currency
fluctuation. The latter weakness mentioned Nissan’s lack of innovation in the U.S. is caused by the company being

4. a relatively late-mover into this high-profit margin and high-volume pick-up market. Nissan used to be unable to
compete with other players such as Toyota of Honda in the compact vehicle segment in recent past, due to
misjudging its US models strategy. However, Nissan is making up for its loss within the innovation war by being the
first brand to introduce an all-electric passenger car with competitive price named LEAF in early 2012, follow the
successful launch in Japan in 2010.
Just as important as analyzing Nissan’s internal capabilities, there are external forces that play a part in
determining the company’s success. The first opportunity Nissan and other global automotive makers should
consider is the exponential increase in demand of fast emerging countries in Asia and Europe, such as China, India,
or Russia. Exhibit 3 presents the amount of 18 million new car sales in 2010 for China– a 32% growth from 2009
and almost double the 11.5 million US new car sales of the same year (Schifrin 2011.) The table also presents the
one-year growth from 2009 to 2010 of both 30% of India and Russia. Government policies, as well as continuous
rise in incomes from these mentioned countries contributed to this remarkable jump in automotive demands.
Besides the promising new geographic distribution, Nissan also should pay attention to a brand new car segment
that just opened up due to ongoing environmental and resource- scarcity concerns: lower or zero-emission
vehicles. In fact, these markets are either just recently developed such as the hybrid car segment, or still in its
inception phase with an instance of the electric car. Therefore, if Nissan could effectively penetrate this future-ofthe-industry segment, it would be well regarded as the most innovative brand in the future. However, despite
these foreseen opportunities, there are also potential threats that could hamper Nissan’s automotive business
growth. Those most prominent are the hyper-competition level resulted from total globalization, or market high
saturation level due to increase in sales stagnation from crisis period, or declining in key economies terms.
When discussing highlighted points from the SWOT analysis above, the emphases are for the company to
be more innovative in producing their vehicles, as well as the strategic focus on selling to niche markets with high
potential returns. Considering this, alongside Nissan’s solid financial capabilities shown earlier, the company is
recommended to continue following through with its current endeavor to approach the promising electric vehicles
segment.
There are multiple forces that could push consumers toward electrified automobiles, not only because of
technological feasibility, but also due to governmental and social supports. First of all, gasoline prices have

5. increased dramatically in recent years, influencing political decisions and even military actions. Exhibit 4 shows U.S
historical gas prices from 1991 to 2012 (U.S. Energy Information Administration 2012.) Auto emmisions that
directly lead to air pollution and climate change is another factor favoring the adoption of new auto technology. To
combat with carbon emmision problems, governments around the world have began enacting transportation
emissions regulations. In the U.S., the mandated miles per gallon for passenger cars is 27.5 mpg, increasing to 39
mpg in 2016, and proposed to meet the minimum of 62 mpg in 2025 (Schifrin 2011.) On the flip side, U.S. Federal
Government also created a tax incentives program to promote sales of electric vehicles, deducting $7,500 from
every purchase. Manufacturers are also to receive government funds of $2.4 billion grants, and up tp $25 billion
direct DOE loans. In summary, it will be a wise choice for Nissan to invest in electric cars. Provided a through
analysis of the situation, Nissan’s next recommendations are for the company to strengthen its current battery
industry by both joint ventures strategy, and to strategically focus on selling electric cars to niche, specialized
markets afterwards.
Battery is - by far -the most important and expensive component of an electric car. According to Boston
Consulting Group, the 2010 cost of an automotive lithium-ion battery pack as sold to an original equipment
manufacturer was estimated at $16,000 (BCG 2010.) Given that a LEAF is currently sold for around $27,000 after all
government tax incentives, the cost of battery accounts for more than 50% of total cost. Therefore, it is a must to
Nissan to touch into this industry and try to reduce the cost. The company is set up its first joint venture with
Japanese battery maker called Automotive Energy Supply Corporation (AESC), owning 51% of the JV. The
collaboration helps Nissan gain multiple advantages because haivng AESC as a supplier meant Nissan can control
the required supplies to meet its demands for battery in electric cars production. Also through simultaneous
engineering and coordination, Nissan can have quicker time to market and lower cost – the core desire. However,
figures has shown that the single JV self-supply model will not be suficient enough to serve Nissan’s increasing
demand for batteries. It is predicted that in 2015, the required number of batteries would reach the behemount
amount of 500,000 units in order to supply Nissan’s plan of mass marketing its electric vehicles, whearas by the
end of 2011, AESC only has a capacity of 90,000 units. This is the main reason why the company has been
outsourcing batteries outside AESC and its Renault’s alliance , purchasing from other battery makers in recent
years. Given Nissan’s total focus on the electric car segment, it is recommended for the company to take another
step ahead, alliancing with other battery corporations. By producing more, Nissan will not have to spend for

6. outsourcing, also unit price would certain drop as well- due to economies of scale. One particular firm Nissan
should consider is the Korean based LG Chem, a large player in battery industry who is a direct competitor of AESCselling batteries for other automakers, notably Chevy Volt. The reason Nissan should choose LG Chem is because
they possess similar technology as AESC, being inclose distance to both Nissan’s headquarter and AESC, which
would expedite the joint venturing process.
Turning to a different matter, “Range Anxiety” has always been the term associated with customers’
being afraid of getting stuck on the road when electric vehicle’ batteries run out and there is no other back-up
engine. At the present, record shows that Nissan LEAF has a total maximum range of 100 miles per charge,
meaning car drivers have to charge their vehicles every 100 miles they drive. Even though record shows that 95
percent of Americans drive less than 100 miles per day, or 75 percent drive less than 40 miles per day (Jensen
2012,) the need for long-range drives- travelling, for instance- is also there. To solve this problem, Nissan has been
trying to develop the supported infrastructure of public charging station to aid drivers. However, building
sufficient amount of electrical stations require huge amount of capital investments, as well as bureaucratic work.
Therefore, Nissan is recommended to only concentrate their effort on specialized markets that show good sights of
support to their electric cars system. For example, an ideal market would be a state or country small in size, with
large percentage of car owners driving less than the maximum specific range (for LEAF this amount is 100 mpg),
and perhaps with all major cities or towns being in close proximity from each others. As far as the geographic
distribution is analyzed, it is idealistic for Nissan to focus sales on small and developed countries with great
demand for high –tech vehicles such as Japan, Korea, Israel in Asia since they are close to Nissan’s headquarter and
electric cars’ factories, or the Northern European countries- also relatively small in size- with constant
environmental responsibility. Nissan can also look to market in big cities in emerging markets such as Beijing or
Shanghai in China, Mumbai or Delhi in India, Moscow or Saint Petersburg in Russia. Those are the cities of
promising markets with highest growth for new car sales.
In conclusion, even though it would involve tremendous work for Nissan Motor to complete the quest of
being the first automotive brand to provide mass-market sales for electric zero-emission vehicles at an affordable
price, Nissan does possess what it requires to successfully implement this breakthrough technology. Nevertheless,
the company has to carefully consider its strategic decisions over the next few years. Once Nissan reaches its
goals, both the company and the society will be greatly benefitted.

7. Works Cited
BCG. "Batteries for Electric Cars: Challenges, Opportunities, and the Outlook to 2020." Boston Consulting
Group (2010).
Jensen, Cheryl. "Pouring Over The New LEAF." Chicago Tribune (2011).
Nissan Global. "Nissan Annual Reports 2011." March 2011. Nissan For Investor. http://www.nissanglobal.com/EN/IR/LIBRARY/AR/index.html.
Schifrin, Debra. "Nissan's Electric Vehicle Strategy in 2011." Standford Graduate School of Business: Case
SM-189 (2011): 22.
U.S. Energy Information Administration. www.eia.gov. May 2012.
http://www.eia.gov/petroleum/gasdiesel/.

8. Exhibit 3
New Car Sales for Selected Countries and Regions in 2010
(In million dollars)
2010
Growth from 2009
U.S.
11.5
10.5%
China
18
32%
Japan
5
7.5%
European Union
13.4
-5.5%
India
2
30%
Russia
13
30%
Exhibit 4

9. Feb 01, 2012
Apr 01, 2011
Jun 01, 2010
Aug 01, 2009
Oct 01, 2008
Dec 01, 2007
Feb 01, 2007
Apr 01, 2006
Jun 01, 2005
Aug 01, 2004
Oct 01, 2003
Dec 01, 2002
Feb 01, 2002
Apr 01, 2001
Jun 01, 2000
Aug 01, 1999
Oct 01, 1998
Dec 01, 1997
Feb 01, 1997
Apr 01, 1996
Jun 01, 1995
Aug 01, 1994
Oct 01, 1993
Dec 01, 1992
Feb 01, 1992
Apr 01, 1991
Dollars Per Gallon
4.5
U.S. Gasoline Prices Historical Chart
4
3.5
3
2.5
2
1.5
1
0.5
0