By on June 27, 2011

Eight percent global market share. Eight percent operating profit. And all of that by 2016 – two times eight, get it? In Nissan’s glitzy waterfront headquarters in Yokohama, CEO Carlos Ghosn today presented a six year plan, called “Power 88.” The plan is audacious and auspicious at the same time.

Let’s do the auspicious part first.

8 is a lucky number in Japan. In China, which becomes more and more important for Nissan, one cannot have enough eights. According to the all-knowing Wikipedia, “a telephone number with all digits being eights was sold for $270,723 in Chengdu, China. The opening ceremony of the Summer Olympics in Beijing began on 8/8/08 at 8 seconds and 8 minutes past 8 pm. A man in Hangzhou offered to sell his license plate reading A88888 for RMB 1.12 million (roughly USD164,000).” In Japan, one does not pig out on eights. In this minimalist culture, one 8 is lucky enough. But to succeed with the Power 88 plan, Nissan will need all the luck it can get.

The plan is audacious, because in 2010, Nissan sold some 4 million cars worldwide, for a market share of 5.8 percent. Setting a target of 8 percent market share by 2016 takes gumption. When a reporter asked Ghosn for his production target, Carlos the Hawk waved his arms and smugly said: “We figure 90 million units worldwide by 2016. You can take the 8 percent and do your own math.” Carlos the Calculator he is not. Alright, my calculator says 7.2 million Nissans a year by 2016, more than Toyota wants to sell worldwide this year.

The plan is absolutely audacious, because 8 percent operating profit is considered a miracle for a mass market producer. Especially for one that is hobbled by the high yen. Ford’s operating profit margin was 6.1 percent last year. Profits are generated by selling more and spending less. Nissan has saved 5 percent each year since the turn-around, and is hell-bent on continuing this in the future.

You can’t get new market share with old cars. Even more audaciously, “Nissan will deliver one new vehicle every six weeks, during the next six years.” More sixes: “By 2016, Nissan will have 66 Nissan and Infiniti vehicles in its global portfolio.” (My numerologist tells me that the number 6 carries no special meaning in the Japanese culture, and is only mildly auspicious in China.)

66 is only 2 models more than today.  But there is more numerology: “We will consolidate some models and add others, eliminating 13 and adding 15 new models,” said Ghosn. Some of them might be trucks. “By fiscal 2016, Nissan will be the world’s leading light commercial vehicle manufacturer,” threatened Ghosn.

In 2007, 60 percent of all cars worldwide were sold in established markets, 40 percent in emerging markets. By 2016, Nissan expects that to flip-flop.  40 percent in established markets. 60 percent in emerging markets. And this is where Nissan wants to play a leading role.

Nissan is the largest Japanese car maker in China with a 6.2 percent market share. Nissan is aggressively expanding capacity in China and aims at 10 percent market share. In Brazil, Nissan targets “a minimum of 5 percent market share.” How do they want to perform that miracle? Says Ghosn: “We will build a new plant in Brazil, with a capacity of 200,000 units — as a first step.”

In Europe, Nissan wants to become no less than the largest volume Asian brand. In the ASEAN countries, Nissan wants to increase its market share from 6 percent today to 15 percent by 2016.

“Some people keep saying we make electric vehicles for the brand,” said Ghosn and sent some withering glances in the general direction of some reporters. ”We make electric vehicles to make money.” Ghosn says that they have sold 8,000 Leafs worldwide so far. The only thing that is keeping them from selling more are Nissan’s capacity problems. “Electric cars demonstrate that what is good for the planet is also a good business,” said Ghosn and announced that the Nissan-Renault Alliance wants to sell 1.5 million EVs by 2016, helped by four EVs under the Nissan brand and another 4 with the Renault badge. Ghosn figures that until 2015, the Alliance will have most of the EV market for themselves, dismissing “manufacturers who just make a few hundred.”

Not officially in the Power 88 plan: Nissan strives to kill the jobs of journos. Under the firm hand of Dan Sloan, former bureau chief at Reuters Singapore, Nissan is setting up a content factory that will have the news out before the members of the media have even left the conference room.

“This event will be streamed live over the Internet,” said an announcer at the beginning. ”Keep that in mind.”

Fair warning that kept the members of the Fourth Estate from picking their noses, or checking their Blackberries for the latest offerings of Yokohama soaplands.

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13 Comments on “Nissan Enters Figure 8 Race For Market Share And Profits...”


  • avatar
    th009

    The slides don’t really mention Renault at all, but the 8% market share figure surely is including Renault (which is suffering in a stagnant French domestic market). But what about the 8% gross profit, when Renault is handicapped by the French government? Or was the role of Renault explicitly mentioned at all in the press conference?

    Audacious indeed …

  • avatar

    This endless stream of Ghosn pictures is hilarious.

  • avatar
    mike978

    Sounds likely to be achieved but it is classic management to aim high with a stretch goal and if Nissan/Renault do miss, with say 7% profit they will have still done well. Since the auto industry is consolidating they want to ensure their survival and being profitable and large will help in that regard.

    Infiniti is expanding (recently opened in the UK) so that could provide some growth – although luxury Asian brands in Europe don`t have a great track record (i.e. Lexus).

  • avatar
    200k-min

    So Ghosn wants Nissan to nearly double their volume in 5 years? I’ll be interested to see what they release for the North American market. Looking at their current lineup it doesn’t seem to fresh. The Altima and Sentra seem like the only volume vehicles. I rarely ever see a Nissan truck on the road and their SUV’s are all very dated. While I see a lot of previous generation Maxima’s, I rarely if ever see a new model. A family member recently bought a Murano, asked why, the response was Nissan gave them a better deal than Ford would offer on the Edge. So, stack ‘em deep and sell them cheap or come up with compelling vehicles that can compete with very agressive competition.

  • avatar
    Mullholland

    Those still images make it look like he’s trying to conjure up the MC essence of Bob Barker from the Price is Right. Can’t wait to see who gets into the Showcase!

  • avatar
    eldard

    Hyundai will prevent them from their goals. Japanese cars are overpriced, anyway.

  • avatar
    PintoFan

    Pretty ludicrous, and probably disastrous for whatever quality reputation they have left. If VW is any indication, the attempts by these bit players to become huge in such a short time is usually accompanied by a massive output of cheapened, uninspiring product. They might succeed in selling a bazillion more misery boxes like the Versa, but it won’t generate the kind of profitability they need to succeed in these endeavours, and it will only sink their reputation even further.

  • avatar
    Joss

    What does Mr Ghosn have up his sleeve with the Chinese government and light commercial vehicles? Whose been getting their palms stroked?

    Re discounting in Nissan’s NA market. Relative just leased Sentra SE-R with $5.1K employee discount. Civic, Corolla, Elantra and Focus couldn’t match that. The Focus was top pick but couldn’t rub $5.1K off.

  • avatar
    Bryce

    If they get rid of their awful CVT powertrains they may get more sales but Nissan has been going backwards for 20 years or more never ming things like 370z and Gtrs the ordinary product is very ordinary

    • 0 avatar
      srogers

      The Altima is selling extremely well considering how ‘backwards’ its CVT is. Maybe mainstream buyers just like that the transmission is smooth and efficient and care less that it sounds unusual.

      And while I’m not the biggest fan of the GT-R, I’d hardly call it backwards.

  • avatar
    obruni

    Nissan needs a mainstream car that is competitive with the global cars from the other manufacturers: golf, civic, cruze, corolla and focus; the Tiida is not (except maybe the corolla). Until they do so it is hard to take this plan seriously

    Nissan also needs something below the Micra, and rebadged Suzuki Altos are not going to cut it.


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