28th April 2013
Mousa Al Mehairbi
Ahmed Al Hashimi
Outline:
· Overview
· Introduction
· The Development
· Partners and
Difficulties
· Carlos Ghosn
· Nissan in the
UAE
· Conclusion
· Reference
Overview:
This essay
will focus on Nissan Motor Company Ltd. We will provide a full history of the
companies’ development and growth since its creation. The vision and mission
statement of the company and its objectives will also be highlighted.
Furthermore, we will explain how the company faced global challenges and
reacted in terms of operations and financial processes. Statistics about its
revenues and employees will also be reflected in the form of facts and figures.
The company has faced a number of problems, mainly recalling vehicles and
motors. We will explore how the company faced these problems and how they
addressed them.
Introduction:
Nissan Motor
Company Ltd is a Japanese multinational automaker which is headquartered in
Japan. In the past it was a core member of the Nissan group, but after the
directing Carlos Ghosn(CEO) it became a rather independent entity.
Nissan is
the sixth largest automobile manufacturer in the world. Just after General
Motors, Hyundai motors, Volkswagen Group, Ford and Toyota. The company formerly
marketed their vehicles under the Datsun brand name. Its global headquarters is
now located in Nishi-Ku, Yokohama. In the year of 1999 Nissan entered a two way
alliance with Renault S.A. of France. As of 2008 Renault owns 43.5% of Nissan,
while Nissan also holds 15% of Renault’s shares. Along with its normal range of
automobile models Nissan produces a large range of luxury models branded as
Infiniti.
The
Kwaishinsha Motor Car Works were founded by Masujiro Hashimoto in the year of
1911. The company launched its first model in the year of 1914 and called it
“The Dat”.
The newly
launched car’s name was an acronym of the investors’ family names.
Kenjiro Den
Rokuro
Aoyama
Meitaro
Takeuchi
In the year
of 1918 the company was renamed Kwaishinsha Motorcar Co Ltd. In 1925 it was
again renamed to DAT Motorcar Co. The company was recognized for assembling
trucks and passenger cars. In the year of 1930 DAT motor shares were purchased
by Aikawa. Three years later, it was merged with Tobata Casting Automobile
parts department. During the time Tobata was considered part of Nissan. It was
the beginning of Nissan automobile manufacturing.
We have
chosen the Nissan Company because it started off as small company with limited
abilities. In the early 1900’s the market for passenger vehicles was almost
non-existent. This shows that Nissan established outstanding growth within
almost 80 years. Today, it is the 6th largest automaker in the
world.
Development:
Nissan
acquired certain individuals that largely contributed to the company’s growth.
DAT inherited Kubota as Chief Engineer Designer and an American engineer known
as William R Gorham. After Aikawa’s visit to the Detroit car show in 1908, many
ideas were visible for growth. This largely affected the company’s future.
Gorham’s
strategy was to carry out vehicle designs, engine designs and all machinery
from the United States. The Graham Factory provided most of the tooling.
Mitsubishi was given the responsibility to import the machinery on behalf of
Nissan. The items went to the Yokohama Factory in Japan for the production of
vehicles.
In the Mid
50’s Nissan decided to expand into the international automobile market. In 1959
they were able to sell a few cars in the United States. This was largely due to
their participation in the Los Angeles Auto Show. This influenced Nissan to
further establish a subsidiary in the United States. It was named Nissan Motor
Corporation U.S.A. . With a mixture of chic Italianate styling and latest
technology Nissan began improving their passenger sedans. They initiated a
production line of sporty cars. They were named Datsun Fairlady, Datsun 510 and
Datsun 240Z. By 1970 Nissan became one of the largest exporters of automobiles
in the world.
Partners
and Difficulties:
Recently, in
1993 Nissan partnered with Ford to market some minivans. They are known as the
Mercury Villager and Nissan quest; both vehicles were almost identical with
only a few cosmetic differences. The merge of both entities only lasted 9
years. Later on Nissan launched the Titan truck in the year of 2004. This
vehicle was especially produced for the North American market.
In the year
of 1999 Nissan faced severe financial difficulties. This forced them into an
alliance with Renault S.A. of France. This alliance was the first of its kind
which involved French and Japanese car manufacturers. This allowed for Renault
to hold 44.3% of Nissan’s shares and Nissan 15% of Renault’s shares. However,
due to legal restrictions in France Nissan was not given the authority to vote.
After that Renault acquired 22.5% of Nissan Diesel, a company known to
manufacture heavy machinery.
In the early
2000’s hybrid technology became a new automobile trend. Efficiency was vital as
consumers were aiming for rather eco-friendly vehicles. Thus, Nissan and Toyota
agreed to merge with regards to hybrid technology. With the help of Toyota,
Nissan unveiled its new hybrid prototype in the year of 2004. In 2010 the merge
was collapsed and Nissan no longer had ties with Toyota. Their vehicles were no
longer based on the Toyota technology.
One of
Nissans factories known as Washington which is located in the United Kingdom
announced that over 1200 jobs were to be cut down. This was mostly due to
economic reasons that spiked a downturn in the car selling market in 2008.
Nissan later
realized that consumers faced issues with various models that had already been
sold in large quantities. The only solution available was a car recall. In
March of 2010 Nissan announced to fix factory faults with brake pads and gas
gauges. The recall had brought in almost 2 million vehicles worldwide.
Carlos
Ghosn:
Is a French
Lebanese Brazilian , who spent his early life in Lebanon, and then moved to
Paris to complete his studies at Ecole Polytechnique. After his graduation
Carlos spent around 18 years at the Michelin & Cie which is a major tire
producer in Europe. He had worked in multiple Michelin factories. After gaining
experience with the firm and showing great ambition, Carlos was later appointed
Chief Executive Officer of the South American operations. He largely influenced
the firm and brought many new ideas that subjected to further growth of the
company. After his experience in a
multicultural working environment he emphasized diversity as a core business
attribute in the firm.
After that Ghosn moved to Northern America where
he became the CEO of Michelin’s North American Operations. Ghosn was later
offered a high position at Renault. He decided that his management style could
be more beneficial and that there was a higher potential for growth at a
Renault. He was given an Executive position that required responsibilities such
as advanced research, development, purchasing and supervision of Renault
activities in South America.
Renault
later acquired nearly 38 percent stake in Nissan. While maintaining his role at
Renault, Ghosn later became Chief operating officer in the late 90’s. During
the time Nissan had encountered many marketing and operating issues. After an
offer from Nissan, he decided to join them as Chief Executive Officer. He was
subject to positions at two different companies. Ghosn faced a large burden
when he joined Nissan. The company had not only been facing 20 billion dollars
in debt but it was also only generating profits from 3 of its 48 vehicle
models. Expectations to reverse the company’s debt were considered rather
impossible. Ghosn said “I promise to resign if the company would not reach
profitability by the end of 2002”. He was, however, certain that Nissan would
not have any debts by the end of 2005.
Ghosn met
his promises and Nissan’s net profits tremendously climbed. His three
turnaround plan proved adequate and Nissan was back on track during the first
year of Ghosn’s appointment. His work had paid off and Nissan became one of the
most profitable automakers in the industry.
In 2005
Carlos Ghosn was CEO of two large companies both Nissan and Renault , after the
turnaround that Carlos has made to Nissan from near bankruptcy he earned the
nicknames “le cost killer” and “Mr. Fix it”. His work not only brought him fame
but he was also considered one of the most famous business men in global
business.
Carlos Ghosn
is working with both Nissan and Renault and now changing the production line
from fuel to electric cars this is one of his visions of future to Nissan.
Nissan
in the UAE:
The heritage
of Nissan in the UAE goes way back to 1959 when the first Nissan vehicle was
sold in the UAE. Since then Nissan has been a very popular car brand in the
UAE. Currently, Nissan produces a production line that ranges from small
passenger cars to powerful 4x4’s. Nissan Motor Co. Ltd set up a regional Middle
East headquarters in Dubai in 1994. It is the first Japanese car manufacturer
in the Middle East. The HQ has grown and is now covering operations in over 20
countries. Here in the UAE we have a lot of Nissan vehicles nearly every house
has a Nissan for example the Nissan patrol which is a very practical car and
even the Nissan GTR known as the GODZILLA which is a really fast car and even
listed as a super car.
Conclusion:
Since the
1960’s the automobile industy has been the leader of the Japanese industry. Its
status will remain unchallenged in the future , Nissan one of the two biggest
manufacturers has thrived for many years by building up firm subcontracting
systems on the basis of the concentration of the machine industry in Tokyo.
This is also true of Toshiba, NEC, Hitachi, Sony and other companies
Nissan has a
fossilized management system, harbors great antagonism within the company, and
lags behind Toyota in development. Yet Nissan is able to maintain its position
behind Toyota because it’s located in the industrial complex of the Tokyo
region. At present Nissan is making efforts to improve its management system.
Nissan has also succeeded in developing new high-quality cars and the demands
placed on automobiles are diversifying.
A major
change is the shift in demographics and a growing world population.
Expectations show that the world population will grow from 6.7 billion today to
more than 9 billion in 2050 (Nissan). Their will definitely be a large shift in
demand with a growing population. This is not only an expectation but rather a
theory that is supported by basic economics.
Another
major influence is the growing demand for fuel efficient and environmental
friendly vehicles. The increasing awareness of global warming has forced
manufacturers to slowly shift production to hybrids, clean diesel and natural
gas vehicles.
Under Ghosn
Nissan has a clear vision for the future, and with the alliance of Renault they
have the potential to become a powerful entity in the automobile industry.
Passion and efficiency is a clear vision advised by Ghosn for the future of
Nissan and Renault.
References
Renault.com -
Management. (n.d.). Welcome to Renault. Retrieved May 26, 2013, from
http://www.renault.com/en/groupe/management-et-gouvernance/pages/management-et-gouvernance.aspx
Carlos Ghosn -
Wikipedia, the free encyclopedia. (2013, March 22). Wikipedia, the free
encyclopedia. Retrieved May 26, 2013, from
http://en.wikipedia.org/wiki/Carlos_Ghosn
Datsun -
Wikipedia, the free encyclopedia. (2013, January 1). Wikipedia, the free
encyclopedia. Retrieved May 26, 2013, from http://en.wikipedia.org/wiki/Datsun
NISSAN | For
Investors | Message from CEO. (n.d.). Nissan Motor Company Global Website.
Retrieved May 26, 2013, from http://www.nissan-global.com/EN/IR/MESSAGE/
Nissan Motor
Company - Wikipedia, the free encyclopedia. (2013, May 1). Wikipedia, the
free encyclopedia. Retrieved May 26, 2013, from
http://en.wikipedia.org/wiki/Nissan_Motor_Company#Current_developments
Remember Datsun?
It's Coming Back From The Scrap Heap - Forbes. (2012, November 7). Information
for the World's Business Leaders - Forbes.com. Retrieved May 26, 2013, from
http://www.forbes.com/sites/michelinemaynard/2012/03/20/once-a-thorn-in-nissans-side-datsun-is-set-for-a-comeback/
Renault-Nissan
Alliance - Wikipedia, the free encyclopedia. (2012, December 5). Wikipedia,
the free encyclopedia. Retrieved May 26, 2013, from
http://en.wikipedia.org/wiki/Renault-Nissan_Alliance
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