May 14,2008 From Auto News
May 14--Nissan Motor Co. is embarking on a five-year business plan that focuses on electric vehicles, cost cutting and emerging markets such as China, Russia and Brazil.
Key to the push will be an ultracheap car for India. Costing $2,500 wholesale, it will go head to head with the highly anticipated Nano, being developed by Tata Motors.
CEO Carlos Ghosn unveiled the ambitious goals here today, saying Nissan aims for 5 percent revenue growth on average from 2008 to 2012.
To get there, Nissan will roll out the following:
• 60 all-new models in the next five years.
• 15 new technologies every year starting in 2009.
"We have restored our company’s profitability and built a solid foundation and a complete new infrastructure from which growth can continue," Ghosn said. "And that is what we intend to do."
The plan is dubbed Nissan GT 2012, the G standing for "growth" and T representing "trust."
Missed goals
GT 2012 differs from earlier revival plans in avoiding numerical profit targets. The just-ended Nissan Value-Up initiative missed its goal of 4.2 million unit sales by this fiscal year. Value-Up also delivered a 17 percent return on invested capital, short of the hoped-for 20 percent.
Nissan will focus on developing markets because potential exists for explosive growth.
In the United States, for example, there are 800 cars for every 1,000 people, Ghosn said. In China and India, there are fewer than 50 for every 1,000 people.
Nissan thinks its current lineup covers only 79 percent of the global auto market. By introducing models geared toward emerging markets, it wants 94 percent coverage by 2012.
"There is a lot of room for growth," Ghosn said.
Cutting costs
Nissan also is banking on electric cars, as growing concern about global warming boosts demand for greener vehicles. The automaker will bring an electric vehicle to California and Japan in 2010 and plans to mass-market it globally in 2012, Ghosn said.
Meanwhile, Nissan aims to trim costs several ways.
First, over the next five years, the company will double average production volume per auto part by reducing product diversity and simplifying components.
Nissan also aims for 90 percent localized sourcing of parts for all new vehicles built in developing countries.
Finally, the automaker plans to cut the use of precious metals by 50 percent per car on models launching in 2009 and 2010.
Ghosn outlined the plan after reporting a 1.8 percent increase in operating profits to ¥790.83 billion ($7.68 billion) for the fiscal year that ended March 31.
Sales climbed 3.4 percent to ¥10.82 trillion ($105.04 billion) in the 12 months.
But like its Japanese rivals, Nissan expects to be hammered in the current fiscal year by a deteriorating U.S. market, skyrocketing raw material prices and a rising yen.
Nissan sees sales falling 4.38 percent to ¥10.35 trillion ($100.49 billion) in the year ending March 31, 2009, while opera ting profit will plunge 30.45 percent to ¥550.0 billion ($5.34 billion).
Editor: Haijing Qu
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