Nissan 2006 Annual Report Download - page 21

Status of Breakthroughs
Nissan Annual Report 2005 19
LIGHT COMMERCIAL VEHICLES
Building the Right Infrastructure
to Serve LCV Customers
ANDREW PALMER
Corporate Vice President
Our results for fiscal 2005 surpassed even my
original expectations. The 2004 result—312,000
units and 4 percent operating margin—was the
reference point for the new three-year LCV
breakthrough plan. Our objective was a 40
percent increase in volume and a doubling of
profitability to 8 percent.
Well, we finished the year with a shade over 400,000
units sold and a 7.7 percent operating margin. Put
another way, with two years left we have gaps of just
34,000 units and 0.3 percent to close.
We didn’t launch any new LCV products in fiscal
2005. This was really a year to give the business
side some serious attention. We started rolling out
the business unit regionally, establishing a dedicated
LCV & Fleet division in North America and another in
Mexico. We now have a properly tuned central LCV
organization in Europe. Our sales and marketing
activities are more aggressive, and we’re challenging
the GOM regions on how they sell vehicles. We rolled
out existing models in new GOM territories, like
Egypt, where we began selling the Urvan.
Japan remains our number one LCV market in
volume terms at 140,000 units. China is number two,
through our partnership with Dongfeng, and
represents a vital market for Nissan’s LCV business.
Our team in Europe has made some aggressive
future commitments. Mexico is also big for us. We
hold a leading position with the pickups and the
Urvan. In our plans, Mexico represents a future
staging platform for Latin America. After that, you've
got GOM, which collectively goes from a relatively
minor part of our business to a major growth engine
as we look to 2010.
The most important thing about the U.S. is that
we do not sell LCVs there yet. It’s a huge opportunity
for us, particularly because North American LCV
customers have many unmet needs. First, however,
we need to understand the distribution model and
these unmet needs. We started a study a year ago
and have identified several interesting opportunities.
In Japan, one of the world’s most saturated
markets, we actually overachieved our business plan
by almost 10,000 units. Conventional wisdom says
there’s little opportunity there. However, I think there
is a lot of potential, and the battlefield is that of
customer satisfaction through services.
Two years of research have shown us that LCV
customers view service very differently from
passenger vehicle customers. In fact, services are
just as important to them as the product. LCV
customers are buying something they expect to
serve them for a long time, to operate with perfect
reliability and with a low cost of ownership. They do
extensive online research before talking to us. They
want their vehicles serviced outside of normal
working hours. You can see this behavior more or
500
400
(Thousand units) (Consolidated operating margin %)
300
200
100
0
10
8
6
4
2
0
’00 ’01 ’03’02 ’05’04 ’07
NRP Nissan 180 Nissan Value-Up
400
+28.2%
8.0%
7.7%
434
+40%
Japan
Specialized LCV
dealerships being
put in place
North America
Dedicated team
in place to
implement
strategy
Europe
Specialized LCV
dealerships to be
introduced
2
PERFORMANCE
Volume and Operating Margin Activities by Regions