NISSAN in France Best in France Case Study 15 December 2003 Emiliano Leggieri, Tracy Lee, Yoshi Shiokawa, Tanya Svidler.

NISSAN in NISSAN in FranceFrance

Best in France Case StudyBest in France Case Study

15 December 2003 15 December 2003

Emiliano Leggieri, Tracy Lee, Yoshi Shiokawa, Tanya Svidler

The Nissan CompanyThe Nissan Company One of the oldest and famous car manufacturers in the world. One of the oldest and famous car manufacturers in the world. Established in Japan in 1933. Established in Japan in 1933. Expanded to other world markets, beginning with North America where it promotes its Expanded to other world markets, beginning with North America where it promotes its

incredibly stylish Infiniti Brand. incredibly stylish Infiniti Brand. In 1991 Nissan established a representation in Europe, with the key center in In 1991 Nissan established a representation in Europe, with the key center in

Netherlands. In 1999, the Nissan Europe moves headquarters to Paris, France.Netherlands. In 1999, the Nissan Europe moves headquarters to Paris, France. The success of European project is due to strategic alliance with Renault. The success of European project is due to strategic alliance with Renault. The world sales in fiscal 2003 (ending March 31) were 6,828,588 Japanese YenThe world sales in fiscal 2003 (ending March 31) were 6,828,588 Japanese Yen

Latest sale figures available: Latest sale figures available:

Nissan Europe reports best ever September sales with a 20% increase against 2002 Nissan Europe reports best ever September sales with a 20% increase against 2002 Nissan Europe has registered its best ever September sales. Nissan Europe has registered its best ever September sales.

- Total unit sales of 57,044 vehicles- Total unit sales of 57,044 vehicles- Sales increased 20% over the same month last year.- Sales increased 20% over the same month last year.

Nine month period from January to September 2003: Nine month period from January to September 2003: - Nissan Europe sold 400,913 units- Nissan Europe sold 400,913 units- 9.4% up from last year- 9.4% up from last year

Nissan France sold 3,596 units in September Nissan France sold 3,596 units in September Nissan France market share is 1.93% Nissan France market share is 1.93%

19.4% increase compared to last year.19.4% increase compared to last year. Nine month period from January to September 2003:Nine month period from January to September 2003:

- Nissan sold 32,936 units in France- Nissan sold 32,936 units in France- 25.5% compared to last year- 25.5% compared to last year

Why Nissan came to Why Nissan came to FranceFrance

Nissan believes that it is essential to expand international presence. Nissan believes that it is essential to expand international presence.

Dedication to international growth:Dedication to international growth: In 1934, first export of vehicles to AustraliaIn 1934, first export of vehicles to Australia Establishment of Nissan Mexicana, S.A. de C.V. in 1961Establishment of Nissan Mexicana, S.A. de C.V. in 1961 Established two strategic manufacturing bases overseas in 1980s:Established two strategic manufacturing bases overseas in 1980s:

Nissan Motor Manufacturing Corp., U.S.A. in 1980Nissan Motor Manufacturing Corp., U.S.A. in 1980 Nissan Motor Manufacturing (UK) Limited in 1984. Nissan Motor Manufacturing (UK) Limited in 1984.

Today, Nissan operates manufacturing and assembly plants in 17 countries around the world. Today, Nissan operates manufacturing and assembly plants in 17 countries around the world.

Nissan signed an agreement with France's Renault SA concerning a comprehensive global Nissan signed an agreement with France's Renault SA concerning a comprehensive global alliance aimed at achieving profitable growth for both companies in 1999.alliance aimed at achieving profitable growth for both companies in 1999.

This way, Nissan entered European market with a variety of models that cater to all tastesThis way, Nissan entered European market with a variety of models that cater to all tastes Renault agreement made France an extremely strategic locationRenault agreement made France an extremely strategic location

Original headquarters of Nissan Europe -- in NetherlandsOriginal headquarters of Nissan Europe -- in Netherlands In 1999, moved them to ParisIn 1999, moved them to Paris

France is important because it is at the heart of EuropeFrance is important because it is at the heart of Europe Strategic alliance with Renault gave many advantagesStrategic alliance with Renault gave many advantages

Nissan’s valuesNissan’s valuesNissan standards:Nissan standards:

QualityQuality Reliability Reliability Development as a CompanyDevelopment as a Company Speedy delivery and quality leaderSpeedy delivery and quality leader

Renault standards:Renault standards: Very different in everything Very different in everything Cost-control leaderCost-control leader

Result:Result:

- Nissan is determined to raise Renault’s standards- Nissan is determined to raise Renault’s standards

- Nissan and Renault will both benefit from each other’s strengths through NRP:- Nissan and Renault will both benefit from each other’s strengths through NRP:

►►Nissan Revival PlanNissan Revival Plan Instill Nissans’ concept of PDCA in Renault:Instill Nissans’ concept of PDCA in Renault:

Renault’s weakness is in ACTION, Nissan is working on improvementRenault’s weakness is in ACTION, Nissan is working on improvement

Alliance with Renault brought many benefits, but also disadvantages. The difficulties included very different values of the two leaders

PLAN

ACTION

DO

CHECK

Nissan’s plansNissan’s plans Nissan Revival Plan completedNissan Revival Plan completed

A comprehensive restructuring plan designed to achieve lasting profitable A comprehensive restructuring plan designed to achieve lasting profitable growth on a global level. Under the NRP, steadfast efforts were made to growth on a global level. Under the NRP, steadfast efforts were made to enhance product appeal and competitiveness besides cutting purchasing enhance product appeal and competitiveness besides cutting purchasing costs and indebtedness. costs and indebtedness.

Bold three-year plan designed to revive the companyBold three-year plan designed to revive the company Finished one year ahead of schedule. Finished one year ahead of schedule.

Result: the all-new Altima won the North American Car of the Year Award in Result: the all-new Altima won the North American Car of the Year Award in

January 2002.January 2002. New 3-year business plan -- NISSAN 180New 3-year business plan -- NISSAN 180

Comprehensive three-year operational blueprint for Nissan's continuing revival, Comprehensive three-year operational blueprint for Nissan's continuing revival, Calling for growth, profit and zero debt.Calling for growth, profit and zero debt.

Roll out new attractive products in various markets worldwideRoll out new attractive products in various markets worldwide Includes the all-new March launched February 2002 in Japan.Includes the all-new March launched February 2002 in Japan.

Nissan’s ProductsNissan’s Products

Terrano

Almera

Interstar Combi

Nissan 350z-pack

Pick up

Tino

X-trail

Patrol GRPrimastar Combi

Nouvelle Micra

Nissan offers a unique variety of vehicles that target all market segments, but are united by Nissan offers a unique variety of vehicles that target all market segments, but are united by their reliability, safety and very high quality.their reliability, safety and very high quality.

Primera

Nissan's clientsNissan's clients Catering to very wise range of customersCatering to very wise range of customers

►►►►►►Young, ambitious sporty people: Young, ambitious sporty people: → → Nissan 350z-packNissan 350z-pack→ → PrimeraPrimera→ → Nouvelle MicraNouvelle Micra

►►►►►►Older people with kids:Older people with kids: → →Tino Tino → →AlmeraAlmera → → Primastar CombiPrimastar Combi

►►►►►►Adventurous people of all ages:Adventurous people of all ages: → → Terrano Terrano → → X-RailX-Rail

However, there are dramatic differences in expectations between Japanese However, there are dramatic differences in expectations between Japanese and French customers:and French customers:

Japanese change cars very quickly, every 5-6 yearsJapanese change cars very quickly, every 5-6 years French change cars every 10-12 yearsFrench change cars every 10-12 years Japanese are very careful with carsJapanese are very careful with cars French park “French style” – pushing their way through, causing scratches and French park “French style” – pushing their way through, causing scratches and

other damageother damage

Constraints in FranceConstraints in France Dramatic difference in mentality of French and Dramatic difference in mentality of French and

Japanese people in relation to work and cars. Japanese people in relation to work and cars.

French engineers: very intelligent, very logical, but completely out of touch with the end-French engineers: very intelligent, very logical, but completely out of touch with the end-customercustomer

Japanese engineers: very close to customer, very detailed Japanese engineers: very close to customer, very detailed

Differences in management style:Differences in management style: French society—very small groups in controlFrench society—very small groups in control

Hard to promote vehiclesHard to promote vehicles

French customer– very cleverFrench customer– very clever

Different countries have different specificsDifferent countries have different specifics

Adaptation to FranceAdaptation to France Work in France through integration with RenaultWork in France through integration with Renault Get maximum benefits from alliance with the French market leader:Get maximum benefits from alliance with the French market leader:

Created 14 FTT units throughout the two organizations: Created 14 FTT units throughout the two organizations: Function Task Team Function Task Team

Settle cultural differences through CCT units Settle cultural differences through CCT units Cross-Company TeamCross-Company Team

Compensation, appraisal and motivation:Compensation, appraisal and motivation: Very complicated appraisal systemVery complicated appraisal system Employee must reach target to maintain salaryEmployee must reach target to maintain salary If target is reached, then there is also a bonusIf target is reached, then there is also a bonus

Hiring:Hiring: Very good system for hiring representatives of different culturesVery good system for hiring representatives of different cultures Heavy use of Japanese expatriates in France Heavy use of Japanese expatriates in France

Full scale of alliance has not been developed yet.Full scale of alliance has not been developed yet. Training: Training:

SeminarsSeminars Quality training Quality training Work as a team on all tasksWork as a team on all tasks

Job Design: mixed assignmentsJob Design: mixed assignments Communication policies:Communication policies:

Mostly e-mailMostly e-mail Reporting difficult due to different fiscal yearReporting difficult due to different fiscal year

Key Constraint CostsKey Constraint Costs

France is different from other locations in terms of France is different from other locations in terms of operating costs due to alliance with Renaultoperating costs due to alliance with Renault

Travel and communication costs—major constraintTravel and communication costs—major constraint

Communication constraints Communication constraints Language Language InfrastructureInfrastructure

Key Benefits of being in Key Benefits of being in FranceFrance

Saving on production costs, as Renault allows the use of their French plants Saving on production costs, as Renault allows the use of their French plants for productionfor production

Saving on real estate as Renault allows the use of their facilities in FranceSaving on real estate as Renault allows the use of their facilities in France

Successful integration of French managers into global organization: Successful integration of French managers into global organization: Intelligent, experienced workersIntelligent, experienced workers Pay similar to other cultures Pay similar to other cultures

Market potential: Market potential: Good for other European countriesGood for other European countries Sustainable market share in France, moderate growth.Sustainable market share in France, moderate growth.

Essential AdviceEssential Advice Take into account the mentality of French peopleTake into account the mentality of French people

Consider all factors of working with French peopleConsider all factors of working with French people

Consider nuances of French document processing systemConsider nuances of French document processing system

Do a thorough market research Do a thorough market research

We ThankWe Thank

NORIHIDE AYABENORIHIDE AYABE

Conformity Methods and Tools Department Senior Manager Conformity Methods and Tools Department Senior Manager

RENAULT RENAULT

Engineering Methods DepartmentEngineering Methods Department

Address: TCR RUC 158, 1 rue du Golf, 78288 Guyancourt CedexAddress: TCR RUC 158, 1 rue du Golf, 78288 Guyancourt Cedex

Tel: 33 01 30 03 31 77Tel: 33 01 30 03 31 77

E-mail E-mail [email protected]@renault.com

BibliographyBibliography

ReferencesReferenceshttp://www.nissan-global.comhttp://www.nissan-global.com

http://www.nissan.co.jphttp://www.nissan.co.jp

http://www.nissan.co.frhttp://www.nissan.co.fr

http://www.firstcall.comhttp://www.firstcall.com

http://www.edgar-online.comhttp://www.edgar-online.com

Our TeamOur Team Emiliano Leggieri, 8 rue Eric Tabarly, Apt 2-412, Massy 91300, FranceEmiliano Leggieri, 8 rue Eric Tabarly, Apt 2-412, Massy 91300, France

Tracy Lee, 8 rue Eric Tabarly, Apt 1-601, Massy 91300, FranceTracy Lee, 8 rue Eric Tabarly, Apt 1-601, Massy 91300, France

Yoshihisa Shiokawa, 8 rue Eric Tabarly, Apt 2-313, Massy 91300, FranceYoshihisa Shiokawa, 8 rue Eric Tabarly, Apt 2-313, Massy 91300, France

Tanya Svidler, 8 rue Eric Tabarly, Apt 2-113, Massy 91300, France Tanya Svidler, 8 rue Eric Tabarly, Apt 2-113, Massy 91300, France