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Talks about the success of Nishan
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Nissan Motor Co., Ltd
Share of Sales by the World Car Market 2001
Daimler-Chrysler(US&GER)
7.8%
Toyota(J A)10.3%
Ford(US)12.0%
Volckswagen(GER)8.9%
GM(US)14.1%
Peugeot(F)5.5%Honda(J A)
4.6%
Hyundai(KR)4.6%
Nissan(J A)4.5%
Renault(FRA)4.2%
Other23.3%
215,370 billion yen
197,330 billion yen
134,244 billion yen39,549 billion yen
64,638 billion yen
56,209 billion yen
165,327 billion yen
96,331 billion yen
60,896 billion yen
Net Sales (1990-2002)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Toyota Honda Nissan
単位:億
(Billions of yen)
(Year)
Ordinary Income (1990-2002)
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Toyota Honda Nissan
Introduction
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)
Financial Highlights (2001)
Operating Margin : 7.9%
Net Sales $ 51.6b
Ordinary Income $3.5
Operating Income $ 3.1
Net Income $3.1R&D Investments $2.2
Capital alliance of Japanese makers
GM ( US ) Isuzu12.0 %
Suzuki20.0 %
Fuji HeavyIndustries20.0 %
Ford ( US) Mazda33.3 %
Renault ( FRA )
Nissan Motor44.4 %
DC ( US&GER )
Mitsubishi Motors37.3 %
Opel ( GER )
Fiat ( ITA )
Land Rover ( UK )
Jaguar ( UK )
Volvo ( SWE )
Nissan Motor Co.Net sales & ordinary income
5,000,000
5,200,000
5,400,000
5,600,000
5,800,000
6,000,000
6,200,000
6,400,000
6,600,000
6,800,000
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001-300,000
-200,000
-100,000
0
100,000
200,000
300,000
400,000
Net sales Ordinary income
0
500
1000
1500
2000
2500
3000
3500
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
(Billions of Yen)
Net Debt (Automotive Business)
(Year)
Vision / MissionVision
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.
History
Major Events in Nissan’s History -1
• (1933) Jidosha Seizo Co., Ltd., predecessor of Nissan Motor Co., Ltd., is established in Yokohama.
• (1935)The first car manufactured by a fully integrated assembly system rolls off the line at the Yokohama Plant.
Major Events in Nissan’s History -2
• (1960)Nissan wins the 10th Annual Deming Prize for excellence in industrial engineering.
• (1972)Cumulative domestic production surpasses 10 million units.
• (1980)Cumulative exports surpasses 10 million units.
• (1980)Nissan Motor Manufacturing Corporation U.S.A. (NMMC) is established.
• (1984)Nissan Motor Manufacturing (UK) Ltd. is established.
Major Events in Nissan’s History -3
• (1988)Nissan European Technology Centre Ltd. is established in UK.
• (1990)Cumulative production surpasses 50 million units.
• (1994)Nissan Middle East FZE is established in Dubai, UAE.
• (1995)Vehicle production at the Zama Plant ceases.
Major Events in Nissan’s History -4
• (1999)Nissan and Renault signs an agreement for global alliance, including equity participation.
• (1999)The company announces the Nissan Revival Plan (NRP).
• (2002)The company announces new three-year business plan NISSAN 180.
Renault
Renault Financial Highlights (2001)
Operating Margin E 473
Revenues (euro million) E 36,351 Operating Income E 704
Renault net Income E 1,051Investment E 3,314Total workforce (number of persons) :140,417
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1997 1998 1999 2000 2001Revenues
Renault’s revenues (1997-2001)
Nissan Revival Plan
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
Nissan Revival Plan• First announced in October of 1999,
Nissan Revival Plan (NRP) went into action in April, 2000.
• When the NRP was first announced, Nissan’s executive committee announced three bold commitments.
• If any of these were not met, the executive committee members promised to resign.
NRP’s Objective• 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.
“The aim is to grow the company, not shrink it.” said Ghosn.
Goal of Nissan Revival Plan
1. Return Nissan to profitability for 20022. Achieve a consolidated operating profit of 4.5%
of sales by 20023. Reduce costs by 1 trillion Yen and net debt
from 1.4 trillion Yen to less than 700billion Yen by 2002
As ResultsReduce headcount :21,000 (14%) for worldwidePurchase strategy :Appropriate 200billion Yen for Reserve FundThe effect of cost redact :1 trillion Yen
Substance of Nissan Revival Plan
Major Contents of NRP
Enterprise development : Profitable growthPurchase strategy : It is 20% of cost reduction in three years. suppliers Reduction (1,145⇒600)Production : Achievement of optimal production efficiency / the optimal cost. 30% curtailment of productive capacity Sales, General and : To 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 capabilityOrganization : The change to the global organization from
the organization according to area
Results : Attaining the NRP Goals• Purchasing costs : reduced 20 %.• Plant capacity utilization : risen from
51%→75%.• A revamping of the domestic sales
system has reduced sales and administrative costs.
• Worldwide stuffing has been brought in accordance with needs.
• Non-core assets have been sold.• A rededication to R&D has been
matched by 25% increase in efficiency.
Essence of NRP
達成方法
What is ‘Commitment’ ?・ A return to net profitability in 2000.
・ A minimum operating income to sales margin of 4.5% by 2002.
・ Consolidated net automotive debt reduced to less than \700 billion ( $58 b) by 2002.
Nissan announces NRP conclusion one year earlier than planned(2002→2001).
CEO (Hanawa chairman)
COO (Ghosn President)
Executive committee
Planning Domesticsales
Overseasales R&D Produc
-tion Purchase Admin. Europe OthersNorth 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
* ○(2) ○(3)
○(1)
○(2)
○(2)
○(3)
○(1)
◎(4)
○(1)
○(1)
○(1)
○(1)
○(1)
◎(6)
○(1)
○(1)
◎(9)
○(1)
○(1)
○(1)
○(4) ◎(1)
○(1)
○(2)
○(2)
○(1) ○(1)
○(1)
◎(5)
○(1)
○(1)
○(3) ◎(4)
○(3)
○(2)
◎(2)
○(2) ○(5)
○(2)
○(1)
○(1)
○(1) ○(1)
○(2)
○(1)
○(1)
◎(4)
○(1)
○(1)
Investment for the Future• With an additional 1,000 engineers
being added to Nissan’s technical team.
• Massive investments in R&D ( to 4.5% of revenues).
• Investments in capital expenditures ( to 5.5% revenues).
Building Competitive Advantages
New Cars after NRPMarket launching model Sales’ market
2001, Jan. CIMAJapan & North America
Feb. PRIMERA Japan & Europe
Mar. XVLJapan & North America
Oct. STAGEA Japan
2002, Apr. March Japan & Europe
Larel Japan
FAIRLADY- ZJapan & North America
CefiroJapan, Europe& North America
SKYLINE Japan & Europe
TeranoJapan & North America
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.
180
Renewal <March>
March New-MARCH
Driving Wheel Front Front
Seating Capacity 5-persons 5-persons
Engine Displacement 1.3 Litter 1.4 Litter
Length 3,720 mm 3,695 mm
Width 1,585 mm 1,660 mm
Height 1,425 mm 1,525 mm
Price (in Japanese Market,$000)
$11 $10
Renewal< >
Z New-Z
Driving Wheel Rear Rear
Seating Capacity 2-persons 2-persons
Engine Displacement 3.0 Litter 3.5 Litter
Length 4,520 mm 4,310 mm
Width 1,800 mm 1,815 mm
Height 1,255 mm 1,315 mm
Price (in Japanese Market,$000)
$38 $30
Four Pillars of N 180• Generating more revenue.• Reducing costs.• Increasing both quality and
speed.• Maximizing the Alliance with
Renault.NISSAN 180
Ready and Positioned for Growth
The NISSAN180 goal
• One million additional units will be sold by the fiscal year 2004 (October 2004 to September 2005).
Japan : +300,000 unit
US : +300,000
Europe:+300,000
Other markets+300,000
Global Total Market Share Targets: 5.1%
Building the Brand• 28 all-new products will be launched in
all segments, all over the world.• Company executives set the goal of
placing at least three Nissan cars in Japan’s top-ten monthly best-selling lists.
• Nissan’s new brand identity : based on the traditions of technology, imagination and passion.
Strengthen Designing Power• Nissan Design Europe will play a strategically
important role in Nissan’s creative network.• Nissan Design Europe will be home to around
50 international designers, modellers and support staff.
• Nissan Design Europe has increased its staff by 25%, a further indication of the importance of the studio to Nissan’s global design operations.
“Design is fundamental at Nissan. Most importantly it is a key driver behind NISSAN
180, our global growth plan.” said Carlos Ghosn.
Summary Nissan New Business Structure and Model
1) Cross Functional team
2) Restructuring
3) Cut costs + reinvestment1) New Engineers2) Massive R & D investment
4) Restructure to permit Quality and Speed
5) Alliance with Renault
Summary Nissan New Business Structure and Model
1) The New Model of Nissan….Nissan 180
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.
180
Understanding the degree of change required
1.1b
Gerry J Gannon
Institute for International Research