Nissan Motor Company Limited, usually shortened to Nissan is a vehicle manufacturer headquartered in Yokohama. The history of Nissan started with Masujiro Hashimoto who founded Kaishinsha Motor Car Works in 1911 as the first Japan automotive manufacturer. In 1914 they produced their first car, called DAT. The new car’s name was an acronym of the company’s investor surnames. Later it was renamed Kaishinsha Motorcar Co. Ltd in 1918, and later changed to DAT Jidosha & Co. Ltd in 1925. The new company-built trucks as well as DAT and Datsun passenger cars. The Tokyo based DAT motors in 1926 merged with the Jitsuyo Jidosha Seizo based in Osaka to become DAT Jidosha Seizo Co. Ltd Automobile Manufacturing Co. Ltd. The company produced a series of light cars and trucks under the name Lila.
In 1931 DAT produced a new smaller passenger car called Datsun Type 11, thereafter Yoshisuke Aikawa founded the holding company Nihon Sangyo, the name Nissan was derived from combining the name of the company. In 1934 a new subsidiary was incorporated named Nissan Motor Co. Ltd.
Nissan in the 1950’s accelerated setting up new plants internationally and exploring new markets like the United States and Europe. Nissan by 1970 was the world’s largest automobile exporter because the small car line met unmet needs in markets even in Australia. In1973 the oil crisis precipitated changes throughout the motor industry making consumer demand for high quality small economy cars to rise rapidly. Nissan responded by widely marketing the Nissan Sunny in Australia, Taiwan, New Zealand and South Africa.
By 1980’s Datsun a brand of Nissan has for a long period of time been the best-selling Japanese brand in Europe despite export tariffs and high delivery costs. Despite not having a factory Nissan maintained this status, however in 1986 it set up a factory in the City of Sunderland which by the year 2007 was producing about 400,000 cars a year.
In the 1990 Nissan had very successful brands and won many accolades as a result of their well-built, high quality cars which excelled in racing and motor sports like the Nissan Skyline. The Nissan Skyline in 1991 won 29/29 races in the Japan Touring Car Championship, the car was named Godzilla a mythical creature in Japanese culture. The car was loved by customers as it was a reliable, powerful and very fast car, Nissan had a reputation of making cars that were fun to drive.
However, by the year 1997 it seemed to customers that Nissan was still making good cars, but competitors were making better cars. Corporate leadership turnover and strategies that were not working, led to Nissan searching for a new leader to save the brand.
Enter Carlos Ghosn in 2001, appointed chief executive officer of Nissan. Ghosn was named C.E.O based on his success in turning around Renault. On his appointment Ghosn went to work to find areas where Nissan was losing money. At this point it is important to note that Nissan had contracts with four companies that had specialized in creating parts for the company. The parts they made were very good quality and were long lasting, this had given Nissan a good reputation as a car build to last.
Ghosn cancelled these contracts and Nissan began to make the same parts but not of the same quality which meant that the reputation Nissan had of building study cars was at stake. The cancelled contracts led to a dramatic increase in unemployment in Japan and reduced public support. Ghosn demanded higher sales and increased market share causing the Nissan executives to employ questionable tactics alienating dealers. He wanted unrelented growth and pushed for it at the expense of revenue and consequently profitability. These strategies seemed to work in the first year and a half, and profits started to grow, and Ghosn demanded more growth.
As profits grew and the effects of the 2008 credit crunch started to ease up Nissan announced an aggressive plan to grow their global market share from 8-8.5%. The plan was a good plan, but it did not account for the changing preferences consumers had to buy sport utility vehicles and pickups. To keep dealers selling and demand growth Nissan offered dealers incentives to sell, sales grew dramatically but incentives ‘ate’ profits. The target given to dealers kept rising and the dealers got fed up, with recalls on certain models and conflict over raising targets dealers stopped ordering new cars.
Even with the introduction of luxury models in some markets like the United States of America, car buyers still preferred trucks and Sports utility vehicles whereas Nissan heavily depended on small cars and sedans to make profit. In 2019 Ghosn was arrested on allegations of personal use of Nissan assets, under-reporting earnings and using company funds for personal investments.
Ghosn was officially fired from Nissan in November 2018. His successor Hiroto Saikawa changed the corporate strategy to help dealers sell but with no new cars it was an exercise in futility. He resigned after not turning around the company and a new successor Makoto Uchida was appointed. Surprisingly, Ghosn was the chairman of both Nissan and Renault led both to new heights of profits and left both automotive manufacturers destitute.
This is the state of Nissan, from Riches to smaller riches. I am a fan of Nissan and I wish the new CEO all the best. The Nissan GTR is by far the best car they make I love that car and I would love an opportunity to own one, one day.
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