Nissan 2005 Annual Report Download - page 63

Nissan Annual Report 2004 61
EUROPE
Making Profit as a Smaller Player
OUR WORLD
“Europe is one of the most
fragmented automotive
market in the world and
a highly competitive one
besides. Despite our
relatively small size,
however, we have begun to
demonstrate that it is
possible to make money in
Europe. In fact, although
Nissan does not yet deliver
the levels of profitability here
that the U.S. or other markets generate, we surpassed
our NISSAN 180 business targets in fiscal 2004. Our
profitability is now on par with the best European
manufacturers. Nissan has a foundation for increasing
profitability further in the coming years in Europe.
Nissan is already an established name around the
region, and the brand is strongly associated with 4x4
technology, off-road vehicles and pickup trucks.
However, there is also a solid heritage built around
the Micra, a model designed for urban driving. Both
the first and second generations of this car were very
successful, and the third generation is performing
well. To leverage our 4x4 heritage and SUV strength
into the passenger car segment, Nissan is developing
a series of crossover vehicles that blend car-like
performance with 4x4 versatility. The Qashqai concept
vehicle introduced at the 2004 Geneva Motor Show is
the first of these—smaller, more affordable, and
better adapted to European roads. The Qashqai will
go into production in our plant in Sunderland in the
UK in early 2007. The Murano, launched this year, is
a precursor to the Qashqai in the larger executive
segment. Europeans have already taken to the
Murano, driving sales far past our initial forecasts in
all markets. This car is helping make Nissan a brand
that people aspire to own.
Nissan is still a small player in the region, selling 550,000
cars across a very large and diverse territory that stretches
from the Atlantic Ocean to Russia, and from Finland to
Israel. In the past we covered the area through multiple
distribution channels, which we are currently in the process
of simplifying. A few aspects of the European market have
made profitability more difficult to achieve. For example,
automakers must provide models with much diversity:
diesel and gasoline powertrains; manual and automatic
transmissions. The cars must also be engineered to suit the
high driving speeds typical in the region and ensure
superior handling, which results in higher costs.
As in many other mature markets, an incentive war is
raging in Europe. Nissan’s position here, as elsewhere, is to
use incentives selectively and to always protect profitability.
Providing products which customers recognize and
appreciate for their style and attributes rather than being the
best deal is the foundation of Nissan’s profitable growth. We
now have a wide range of products, five of which were newly
launched in 2005, including the Pathfinder and the Navara
pickup. We will release the Micra C+C at the Frankfurt Motor
Show in September, giving customers the option of a unique
standard glass roof in a fully retracting hard convertible top.
Nissan’s manufacturing still defines the leading edge in
Europe. According to The Harbour Report, our plant in
Sunderland is the most productive plant in Europe.
Sunderland will start production on a new B-segment car
based on the Tone concept car in early 2006, followed by
the Qashqai crossover vehicle in early 2007. Our Barcelona
plant, which manufactures SUVs, 4x4s and light
commercial vehicles, will reach full capacity in mid-2005.
Finally, our truck plant in Avila, Spain, which specializes in
light-duty trucks, will start producing a replacement for the
popular Cabstar in late 2006. This efficient production
base is a critical part of our profitable growth scenario.
NISSAN Value-Up has given us a plan for building both
profit and volume. We will not, however, sacrifice profit to
gain volume. How far we can go depends on how fast we
deliver results. I believe that we have much more room to
grow, and to demonstrate that in even a crowded European
market a smaller player can produce significant returns.”
DOMINIQUE THORMANN
Senior Vice President
Nissan Europe