Nissan CEO Carlos Ghosn has announced the firm’s 2011-2016 business plan. The Nissan Power 88 plan aims to increase Nissan’s global market share and sets strong profitability targets for Japan’s No.2 carmaker.
Power 88? Sounds like an FM rock station. What’s Nissan’s plan about?
Putting aside the interesting choice of name for its latest five year plan, Nissan have two main aims with Nissan Power 88: to achieve an 8% global market share by 2016, and to do so with a consistent and sustainable 8% operating profit level.
These aims will be achieved primarily through a new product onslaught. Nissan is talking about a new Nissan model launched every six weeks for the next six years. That’s globally… don’t expect something fresh in your local Nissan showroom every single month and a half.
By 2016 Nissan will have a 66-vehicle product portfolio, covering 92% of all markets and segments. Supporting the expanded product portfolio means further investment in Nissan’s sales channel: the company aims to open another 1500 sales outlets, on top of the 6000 major dealerships in Nissan’s global sales network.
Electric vehicles like Nissan’s pioneering Leaf hatchback haven’t been forgotten, but there’s less of the zeal for EVs in Nissan Power 88 than you hear from Ghosn when his Renault CEO hat is on. Total EV sales for the Renault-Nissan alliance is quoted as reaching 1.5 million sales by 2016. But Nissan Power 88 makes greater mention of Nissan’s Pure Drive eco technologies, including hybrids, cleaner internal combustion engines and CVT transmissions.
What is Nissan’s current position? Are these goals achievable?
If Power 88 is the goal in 2016, then Nissan is currently at Normal 66, with a 5.8% market share, and a 6.1% operating profit margin in 2010. Nissan is expanding into the BRIC (Brazil, Russia, India, China) economies that are driving volume growth for major carmakers. Nissan Power 88 includes plans for adding 200,000 units of production capacity in Brazil, and reaching 1.2 million units production capacity in China during 2012, Nissan is also in talks to buy 25% of Russia’s largest carmaker, AvtoVAZ, which would give the Nissan-Renault alliance a majority stake.
Nissan will have no shortage of rivals for expanded market share. VW Group is intent on becoming global No. 1 in sales by 2018, PSA Peugeot-Citroen wants Peugeot alone to have 7% global market share by 2015, Toyota, GM and Ford are still major players to contend with and the German premium brands are grabbing potential Infiniti buyers while Nissan’s upmarket nameplate lacks global presence. Daimler CEO Dieter Zetsche has also been sounding a cautionary note on continued sales growth, noting inflationary pressures in China, and consequences of the EU debt crisis as factors which could impact on the current growth in car sales.
Nissan CEO Ghosn remains undaunted. ‘Nissan Power 88 is a demanding business plan, but our company has a proven track record of achieving challenging objectives,’
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