Nissan Enters Figure 8 Race For Market Share And Profits
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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- Arthur Dailey I grew up in an era when a teenager could work pumping gas or bussing tables and be able to purchase a vehicle for a couple of thousand dollars and drive it with 'uninsured' status.If a parent advised on the purchase of the vehicle, they would most often point us to a large, stripped/base version, domestic sedan with the smallest possible engine.These cars generally had terrible driving dynamics and little to no safety features, but were easy to work, had large bench seats/interiors and not enough power to get out of their own way.
- MaintenanceCosts I'll guess: 3rd owner, never did even basic maintenance, major component failed, car got towed from the apartment complex parking lot, no one bought it at auction because the repair bill exceeded the value.The chrome pillar appliques support this hypothesis.
- MaintenanceCosts I'm generally in the "I want them to have all the new safety stuff" camp, but new cars are both too fast and too isolating these days. They mask speed enough that a new driver can get way in over his head without really realizing he's even going that fast. This is especially a concern with my youngest, who wants to do everything he does faster. (He has zero fear tearing down hills at 25 mph on his little 20" wheel bike.) I'm hoping for something that is slow and communicates speed well, although I'm not quite sure there is any such thing in today's market.
- KOKing I test-drove a used Equus Ultimate (the one with all the back seat doodads) that was a trade-in at a Ford dealer, and although it was VERY nice to be in as a Lexus LS with Ultra Luxury, it was supposedly in a minor fender-bender that probably wasn't repaired correctly (like a pinched bus cable or something?), and random features didn't work at all.I think this car suffered the same problem in the US that the VW Phaeton did, and probably would've done better if it was badged a Genesis from the get-go.
- Analoggrotto Tesla owners are still smarter than anyone else, regardless.
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
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.