Nissan Company
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CASE STUDY
Nissan’s Turnaround Story
Submitted By: Mudit Agrawal 8nbng196
INTRODUCTION ABOUT NISSAN MOTORS LTD.
In 1970s and early 80s Nissan and Toyota entered into the US market.
By 1985 Nissan became the second largest exporter of automobile after Toyota .
Nissan Strength was Technological competence.
PROBLEMS FOR NISSAN MOTORS LTD.
In late 1980s Nissan started facing severe competition from Toyota and Honda.
Appreciation of YEN against US $.
In 1987 Japanese economy was in boom ,so Nissan started borrowing and raise their production .
Debt for Nissan in 1999 was US$ 22 billion.
Domestic market share had fallen from 17.4% to 13% at the end of first half of 1999.
PROBLEMS FOR NISSAN MOTORS LTD.
Global market share which was 5.8% in 1988 drop down to 4.9% in 1999.
Debt was more than Yen 2.1 billion
Started thinking of Joint venture …
INTRODUCTION OF RENAULT.
Strength of Renault is R&D and Design .
In 1980s Renault was also facing problems.
No global presence and low productivity .
Company reconstructed in 1990 and privatized in 1996.
In 1998 Renault had around 7.9 billion pounds as equity and 1.9 billion pound as cash and was debt free company .
ALLIANCE BETWEEN NISSAN AND RENAULT. o
Expectations regarding Alliance.
o
Global market and Production line .
o
Economic value of Alliance.
o
Agreement was signed between Renault and Nissan .
o
GAC was formed .
o
CEO Carlos Ghosn visited Nissan .
MEMORABLE PICTURE
Yoshikazu Hanawa and Louis Schweitzer 27 th March 1999
ACCORDING TO CEO CARLOS GHOSN. o
Lack of clear Profit-Orientation.
o
Insufficient focus on customers.
o
Too much focus on chasing Competitors.
o
No co-ordination of working.
o
Language problem.
o
Decision making process.
o
Labour Management.
NISSAN REVIVAL PLAN.
o
Common Language – English.
o
Nine Cross-functional teams.
o
Changed Reward System.
o
Career Progression System.
IMPLEMENTATION OF NISSAN REVIVAL PLAN.
o
Cut down in Purchasing Cost .
o
Suppliers were reduced.
o
Overlapping outlets were closed.
o
Plants were closed.
o
Work force were reduced.
THANK YOU
Nissan’s Turnaround Story
Submitted By: Mudit Agrawal 8nbng196
INTRODUCTION ABOUT NISSAN MOTORS LTD.
In 1970s and early 80s Nissan and Toyota entered into the US market.
By 1985 Nissan became the second largest exporter of automobile after Toyota .
Nissan Strength was Technological competence.
PROBLEMS FOR NISSAN MOTORS LTD.
In late 1980s Nissan started facing severe competition from Toyota and Honda.
Appreciation of YEN against US $.
In 1987 Japanese economy was in boom ,so Nissan started borrowing and raise their production .
Debt for Nissan in 1999 was US$ 22 billion.
Domestic market share had fallen from 17.4% to 13% at the end of first half of 1999.
PROBLEMS FOR NISSAN MOTORS LTD.
Global market share which was 5.8% in 1988 drop down to 4.9% in 1999.
Debt was more than Yen 2.1 billion
Started thinking of Joint venture …
INTRODUCTION OF RENAULT.
Strength of Renault is R&D and Design .
In 1980s Renault was also facing problems.
No global presence and low productivity .
Company reconstructed in 1990 and privatized in 1996.
In 1998 Renault had around 7.9 billion pounds as equity and 1.9 billion pound as cash and was debt free company .
ALLIANCE BETWEEN NISSAN AND RENAULT. o
Expectations regarding Alliance.
o
Global market and Production line .
o
Economic value of Alliance.
o
Agreement was signed between Renault and Nissan .
o
GAC was formed .
o
CEO Carlos Ghosn visited Nissan .
MEMORABLE PICTURE
Yoshikazu Hanawa and Louis Schweitzer 27 th March 1999
ACCORDING TO CEO CARLOS GHOSN. o
Lack of clear Profit-Orientation.
o
Insufficient focus on customers.
o
Too much focus on chasing Competitors.
o
No co-ordination of working.
o
Language problem.
o
Decision making process.
o
Labour Management.
NISSAN REVIVAL PLAN.
o
Common Language – English.
o
Nine Cross-functional teams.
o
Changed Reward System.
o
Career Progression System.
IMPLEMENTATION OF NISSAN REVIVAL PLAN.
o
Cut down in Purchasing Cost .
o
Suppliers were reduced.
o
Overlapping outlets were closed.
o
Plants were closed.
o
Work force were reduced.
THANK YOU
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