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Best in France Case Study 15 December 2003

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

2 The Nissan Company One of the oldest and famous car manufacturers in the world. Established in Japan in 1933. Expanded to other world markets, beginning with North America where it promotes its incredibly stylish Infiniti Brand. In 1991 Nissan established a representation in Europe, with the key center in Netherlands. In 1999, the Nissan Europe moves headquarters to Paris, France. 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 Yen Latest sale figures available: Nissan Europe reports best ever September sales with a 20% increase against 2002 Nissan Europe has registered its best ever September sales. - Total unit sales of 57,044 vehicles - Sales increased 20% over the same month last year. Nine month period from January to September 2003: - Nissan Europe sold 400,913 units - 9.4% up from last year Nissan France sold 3,596 units in September Nissan France market share is 1.93% 19.4% increase compared to last year. - Nissan sold 32,936 units in France - 25.5% compared to last year Sales growth explanation: The growth has been driven by successful new products such as the new Micra, as well as strong performance in the 4x4 sector with products such as X-TRAIL and Pickup.

3 Why Nissan came to France
Nissan believes that it is essential to expand international presence. Dedication to international growth: In 1934, first export of vehicles to Australia Establishment of Nissan Mexicana, S.A. de C.V. in 1961 Established two strategic manufacturing bases overseas in 1980s: Nissan Motor Manufacturing Corp., U.S.A. in 1980 Nissan Motor Manufacturing (UK) Limited in 1984. 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 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 tastes Renault agreement made France an extremely strategic location Original headquarters of Nissan Europe -- in Netherlands In 1999, moved them to Paris France is important because it is at the heart of Europe Strategic alliance with Renault gave many advantages

4 Nissan’s values Nissan standards:
Alliance with Renault brought many benefits, but also disadvantages. The difficulties included very different values of the two leaders Nissan standards: Quality Reliability Development as a Company Speedy delivery and quality leader Renault standards: Very different in everything Cost-control leader Result: - Nissan is determined to raise Renault’s standards - Nissan and Renault will both benefit from each other’s strengths through NRP: ►Nissan Revival Plan Instill Nissans’ concept of PDCA in Renault: Renault’s weakness is in ACTION, Nissan is working on improvement

5 Nissan’s plans Nissan Revival Plan completed
A comprehensive restructuring plan designed to achieve lasting profitable growth on a global level. Under the NRP, steadfast efforts were made to enhance product appeal and competitiveness besides cutting purchasing costs and indebtedness. Bold three-year plan designed to revive the company Finished one year ahead of schedule. Result: the all-new Altima won the North American Car of the Year Award in January 2002. New 3-year business plan -- NISSAN 180 Comprehensive three-year operational blueprint for Nissan's continuing revival, Calling for growth, profit and zero debt. Roll out new attractive products in various markets worldwide Includes the all-new March launched February 2002 in Japan.

6 Nissan’s Products Nissan offers a unique variety of vehicles that target all market segments, but are united by their reliability, safety and very high quality. Primera Nouvelle Micra Nissan 350z-pack Interstar Combi Tino Almera Primastar Combi Patrol GR X-trail Pick up Terrano

7 Nissan's clients Catering to very wise range of customers
►►►Young, ambitious sporty people: → Nissan 350z-pack → Primera → Nouvelle Micra ►►►Older people with kids: →Tino →Almera → Primastar Combi ►►►Adventurous people of all ages: → Terrano → X-Rail However, there are dramatic differences in expectations between Japanese and French customers: Japanese change cars very quickly, every 5-6 years French change cars every years Japanese are very careful with cars French park “French style” – pushing their way through, causing scratches and other damage

8 Constraints in France Dramatic difference in mentality of French and Japanese people in relation to work and cars. French engineers: very intelligent, very logical, but completely out of touch with the end-customer Japanese engineers: very close to customer, very detailed Differences in management style: French society—very small groups in control Hard to promote vehicles French customer– very clever Different countries have different specifics

9 Adaptation to France Work in France through integration with Renault
Get maximum benefits from alliance with the French market leader: Created 14 FTT units throughout the two organizations: Function Task Team Settle cultural differences through CCT units Cross-Company Team Compensation, appraisal and motivation: Very complicated appraisal system Employee must reach target to maintain salary If target is reached, then there is also a bonus Hiring: Very good system for hiring representatives of different cultures Heavy use of Japanese expatriates in France Full scale of alliance has not been developed yet. Training: Seminars Quality training Work as a team on all tasks Job Design: mixed assignments Communication policies: Mostly Reporting difficult due to different fiscal year Complicated appraisal system: Renault observes Nissan’s employees, evaluates their performance, reports to headquarters of Nissan in Japan, then appraisal is reviewed by various departments in Japan and then the final compensation decision is made.

10 Key Constraint Costs France is different from other locations in terms of operating costs due to alliance with Renault Travel and communication costs—major constraint Communication constraints Language Infrastructure

11 Key Benefits of being in France
Saving on production costs, as Renault allows the use of their French plants for production Saving on real estate as Renault allows the use of their facilities in France Successful integration of French managers into global organization: Intelligent, experienced workers Pay similar to other cultures Market potential: Good for other European countries Sustainable market share in France, moderate growth.

12 Essential Advice Take into account the mentality of French people
Consider all factors of working with French people Consider nuances of French document processing system Do a thorough market research

13 We Thank NORIHIDE AYABE
Conformity Methods and Tools Department Senior Manager RENAULT Engineering Methods Department Address: TCR RUC 158, 1 rue du Golf, Guyancourt Cedex Tel:

14 Bibliography References http://www.nissan-global.com

15 Our Team Emiliano Leggieri, 8 rue Eric Tabarly, Apt 2-412, Massy 91300, France Tracy Lee, 8 rue Eric Tabarly, Apt 1-601, Massy 91300, France Yoshihisa Shiokawa, 8 rue Eric Tabarly, Apt 2-313, Massy 91300, France Tanya Svidler, 8 rue Eric Tabarly, Apt 2-113, Massy 91300, France


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