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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