Trade.Information

Company Name: Nissan Motor Co. Ltd.

Company Type: Manufacturer & Exporter

Company Category: Hybrid Vehicle

Company Profile

Jidosha-Seizo Kabushiki-Kaisha ("Automobile Manufacturing Co., Ltd." in English) was established on December 26, 1933, taking over all the operations for manufacturing Datsuns from the automobile division of Tobata Casting Co., Ltd., and its company name was changed to Nissan Motor Co., Ltd. on June 1, 1934. The founder was Yoshisuke Aikawa, the brilliant leader of the Nissan combine. He had grand plans to mass-produce 10,000 - 15,000 units per year, and was about to putting his plan into practice.

The first small-size Datsun passenger car rolled off the assembly line at the Yokohama Plant in April 1935, and vehicle exports to Australia were also launched that same year. Datsun cars symbolized Japan's rapid advances in modern industrialization in those days, as evidenced by the contemporary slogan, "The Rising Sun as the flag and Datsun as the car of choice."

VTR: The production line for the Datsuns (small passenger sedans and pickup trucks) is shown at the Yokohama Plant in 1935. (819KB)

Nissan's history goes back to the Kwaishinsha Co., an automobile factory started by Masujiro Hashimoto in Tokyo's Azabu-Hiroo district in 1911. Hashimoto was a pioneer in Japan's automotive industry at its inception and throughout its initial years of struggle.

In 1914, a box-type small passenger car was completed based on his own design, and in the following year the car made its debut on the market under the name of Dat Car. It is a well-known story that the name Dat represents the first letters of the family names of Hashimoto's three principal backers: Kenjiro Den, Rokuro Aoyama and Meitaro Takeuchi.

Jitsuyo Jidosha Co., Ltd., another predecessor of Nissan, was established in Osaka in 1919 to manufacture Gorham-style three-wheeled vehicles, designed by the American engineer William R. Gorham. The company imported machine tools, components and materials from the U.S., and thus was said to be one of the most modern automobile factories.

Kwaishinsha Co. and Jitsuyo Jidohsa Co. merged in 1926 to form Dat Jidosha Seizo Co., which, in 1931, became affiliated with Tobata Casting, a company founded earlier by Aikawa. That would lead two years later to the establishment of Nissan Motor Co.

In 1936, Nissan purchased design plans and plant facilities from Graham-Paige Motors Corp. of the U.S. for the manufacture of passenger cars and trucks. As the signs of war grew stronger, however, production emphasis shifted from small-size Datsun passenger cars to military trucks. During the war, Nissan also manufactured engines for the army's planes and for motor torpedo boats.

VTR:The production line for Nissan heavy-duty trucks and buses is shown at the Yokohama Plant in 1937.(1.1MB)




Although the Yokohama Plant had escaped damage during the air raids, over one-half of the plant was requisitioned by the Occupation Forces for approximately ten years after the war. Nissan was also handicapped in the early postwar period by the fact that many leading auto dealerships, previously affiliated with the old Nissan network, switched to Toyota after the dissolution of Japan Motor Vehicle Distribution Co., Ltd., which had monopolized vehicle distribution during the war.

Nissan resumed production of Nissan trucks in 1945 and Datsun passenger cars in 1947. There was constant labor-management strife in those years, and Nissan suffered a prolonged 100-day strike in 1953. Serious reflection on that bitter experience gave birth to modern labor-management relations based on mutual trust.

In a move to recover from the technological vacuum of the wartime years, Nissan concluded a technical tie-up with Austin Motor Co., Ltd. of the U.K. in 1952, and rolled the first Austin off the line one year later. In 1958, one of the two Datsun 210 cars entered in the Australian Rally, one of the most grueling races in the world, and captured its class championship. Nissan was the first automaker in Japan to receive the annual Deming Prize for engineering excellence in 1960. And through this period, Nissan was steadily putting in place a strong organization to support the company's next stage of dramatic growth.

VTR: A triumphal parade is shown starting from Haneda, Tokyo, toward the Yoshiwara Plant in Shizuoka Prefecture in October 1958. (1.3MB)




The 1959 Bluebird and the 1960 Cedric captivated Japanese car buyers and quickened the pace of motorization in Japan. The Sunny that debuted in 1966 heralded the advent of the "my car" era in Japan, and was a major driving force behind the rapid growth of the small-car market.

In preparation for the liberalization of capital investment in Japan, Nissan brought on line two state-of-the-art manufacturing facilities, the Oppama Plant in 1962 and the Zama Plant in 1965. In 1966,Nissan merged with Prince Motor Co., Ltd., adding the renowned Skyline and Gloria models to its product lineup and incorporating an outstanding engineering staff that continued the excellent tradition of Nakajima and Tachikawa Aircraft Companies, previously manufacturers of distinguished aircraft engines.

The advance of motorization gave rise to increased traffic accidents and contributed to the problem of air pollution. Nissan developed its first Experimental Safety Vehicle (ESV) in 1971 and has adopted a vast array of safety technologies in its production vehicles over the years since then. To prevent air pollution, Japan enforced exhaust emission standards comparable to those mandated by the Muskie Bill (Clean Air Act) in the U.S. Although the standards appeared almost impossible to meet, they were successfully cleared through the use of the three-way catalytic converter system, the most promising technology available at that time. In that process, notable improvements were achieved in automotive electronics and materials engineering.




The two energy crises of the 1970s triggered a rapid increase in exports of small Japanese cars, known for their excellent fuel economy and quality. In fuel economy tests conducted by the U.S. Environmental Protection Agency in 1973, the Sunny finished first and subsequently gained enormous popularity in the U.S. market under the advertising slogan of "Datsun saves."

American automakers at that time were behind in developing small cars, and their slumping sales led to a succession of plant closings and large-scale layoffs. The resultant social issues heightened the mood of protectionism and prompted calls for import quotas on Japanese cars and for Japanese companies to open local production plants in the U.S.

Over the years, Nissan has lived up to its reputation for excellence in engineering by playing a pioneering role in many fields of advanced technology. With the aim of improving fuel economy, Nissan has developed a variety of weight-reducing materials, such as high-tensile steel sheet for body panels, and has also created sophisticated engine management systems for controlling combustion. In addition, Nissan has also been a forerunner in developing and using CAD/CAM systems and industrial robots.




Nissan began early on to develop overseas manufacturing operations, starting with the initiation of knockdown production at Yulon Motor Co., Ltd. in Taiwan in 1959 and the establishment of Nissan Mexicana, S.A. de C.V. in 1961. Then, in the 1980s, Nissan established two strategic manufacturing bases overseas; Nissan Motor Manufacturing Corp., U.S.A. in 1980, and Nissan Motor Manufacturing (UK) Limited in 1984. Today, Nissan operates manufacturing and assembly plants in 17 countries around the world.

In addition to manufacturing, Nissan has also been proceeding with a program to localize R&D operations, including vehicle design and engineering, as well as business management functions at the highest level. This globalization program has now advanced to the stage where decision-making has been localized through the establishment of regional headquarters in North America and Europe. Nissan North America Inc. and Nissan Europe N.V. oversee the entire scope of Nissan's local operations in their respective regions, including product development, manufacturing, procurement, fund-raising and mutual complementation of parts between companies.

Looking at the domestic market, Nissan opened the Kyushu Plant in 1975, adding the new plant with the most advanced automation technology in 1992. Furthermore, in 1994 the Iwaki Plant became operational to manufacture new V6 engines. In the field of marketing, Nissan introduced the Be-1 in 1987 and the Cima in 1988, thereby creating new segments with a "Pike" car, or niche car, and an upper grade personal sedan.

VTR:The automated assembly line for engine components is shown at the Iwaki Plant in 1993. (1.2MB)

Nissan has been working vigorously to address global environmental issues that have caused increasing concern in recent years. The company's environmental efforts include the development of clean power sources for vehicles and wide-ranging activities to promote the recycling of natural resources. Since 1997, Nissan has released one new model after another fitted with fuel-efficient direct-injection gasoline engines and direct-injection diesel engines. Nissan has also been actively expanding application of the belt-driven HYPER CVT continuously variable transmission that delivers improved fuel economy. In November 1999, Nissan adopted on the Cedric/Gloria sedans, marking the world's first application of a CVT to rear-wheel-drive production models powered by a large-displacement engine. Moreover, Nissan released and the two-seater in the early part of 2000.

On March 27, 1999, Nissan and France's Renault SA signed an agreement concerning a comprehensive global alliance aimed at achieving profitable growth for both companies.

Nissan announced on October 18, 1999 the Nissan Revival Plan (NRP), a comprehensive restructuring plan designed to achieve lasting profitable growth on a global level. It accomplished the objectives the NRP by the end of fiscal year 2001, one year ahead of schedule, and posted all-time-high record operating profits. Under the NRP, steadfast efforts were made to enhance product appeal and competitiveness besides cutting purchasing costs and indebtedness. As a result, the all-new Altima won the North American Car of the Year Award in January 2002.

Since this past April, the company has been pushing ahead with "NISSAN 180," a new business plan aimed at achieving additional unit sales of one million vehicles globally in 3 years, among other objectives.

About Company

The late 1990s was a period of intense consolidation in the auto industry, stemming from rapid globalization, the increasing cost of developing ever more sophisticated vehicles, and worldwide automotive production overcapacity. The November 1998 merger of Daimler-Benz AG and Chrysler Corporation that formed DaimlerChrysler AG was the largest partnership created in this period, but there were a number of smaller mergers, acquisitions, and strategic alliances as well. Both Nissan and Renault S.A. of France were eagerly looking for a partner in order to compete in the 21st century. Nissan was rebuffed by both DaimlerChrysler and Ford and Renault was turned away by other Japanese automakers, before the two companies reached an agreement on a global alliance in March 1999. The combination of Nissan and Renault made strategic sense in that the companies' main sales territories and production locales were complementary. In vehicle sales, Nissan was strongest in Japan and other parts of Asia, the United States, Mexico, the Middle East, and South Africa, while Renault concentrated on Europe, Turkey, and South America. The production side followed a similar pattern. On a global basis, the two companies held just more than a nine percent market share, which would position the combination number four in the worldwide auto industry.

As part of the agreement, Renault pumped US$5.4 billion into cash-hungry Nissan in exchange for a 37 percent stake in Nissan Motor and a 22.5 percent stake (later raised to 26 percent) in Nissan Diesel Motor Co., a heavy truck unit. Although it did not secure complete control of Nissan, Renault gained veto power over capital expenditures and installed Carlos Ghosn (rhymes with 'bone') as Nissan's chief operating officer (he became president as well in 2000). The Brazilian-born Ghosn was an executive vice-president at Renault and had engineered a rapid turnaround there after joining the company in 1996. French newspapers tagged him with the nickname 'le cost killer' because of his tenacious approach to cost cutting--his Renault restructuring slashed US$3.5 billion in costs over a three-year period.

The capital injection from Renault quickly reduced Nissan's debt load to ¥1.4 trillion (US$13 billion). Ghosn rapidly began implementing a massive restructuring of Nissan. Nonautomotive operations began to be divested, including mobile and car telephone operations and the aerospace division. Nissan's forklift unit was likely to be sold and Nissan Diesel was a candidate for sale as well, given that Nissan Motor had declared that making cars and light trucks was its core business. In early 2000 Nissan sold a stake it held in Fuji Heavy Industries Ltd. As for the automotive operations, Ghosn in October 1999 laid out a tough cost-containment program slated to be completed by 2002. The program included: a 14 percent workforce reduction--representing 21,000 jobs, primarily in Japan--through attrition, early retirement, and noncore business spinoffs; the closure of five production plants in Japan in 2001 and 2002; the slashing of ¥1 trillion (US$9.5 billion) in annual costs, including a 20 percent reduction in purchasing costs and a 20 percent cut in overhead, the latter to include the elimination of one-fifth of Japanese Nissan dealers; and a 50 percent reduction in debt, to ¥700 billion (US$6.5 billion). Ghosn also began tackling the crucial need for a revitalization of Nissan's bland line of vehicles by substantially increasing capital spending, toward a goal of speeding new products to market four times faster than before. Although such a restructuring was by this time routine in the United States and becoming more commonplace in Europe, Ghosn's plan ran counter to many established business practices in Japan. The biggest question was whether Ghosn could implement the plan without resorting to large-scale layoffs in Japan, which would likely face fierce opposition from workers and labor unions and even from leaders of other Japanese firms. Perhaps to underscore the seriousness of his mission and his determination to turn Nissan around, Ghosn also announced that he would resign if Nissan was not profitable by March 2001.