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Nissan Annual Report 2005 23
Preparing for Local and Global Growth
THAILAND
In 2005 our profit improved,
but we lost some sales
volume. However, we knew
in 2004 when we took over
Siam Nissan Automobile
Co., Ltd. that 2005 and the
first half of 2006 would
be difficult.
There were several reasons
we didn’t chase volume in
2005. First and foremost, two of our major volume-
selling models, the Pickup and the Sunny, were both
at the end of their model cycle. I also discovered how
poor our sales network was in terms of showroom
quality and the way salespeople and service
technicians handled customers.
An additional problem was that the locations of
our showrooms didn’t match up with where our
customers were living. We found that they had
moved from central Bangkok to the suburbs, but the
company had not done any market analysis for over
ten years and was unaware of that. Chasing volume
under these conditions was more likely to increase
customer dissatisfaction than sales.
The first thing I decided to do was prepare for
new products. I also implemented market
representation activities, particularly for Bangkok.
Bangkok represents half of the total demand in
Thailand, but our sales performance there was quite
weak. We began identifying ideal locations for
showrooms and establishing standards for the
showroom and after-sales service.
Through market representation activities, we
discovered the need to find both new dealer
candidates and current dealers willing to make a
bigger investment. By the end of 2005, we’d added
13 showrooms in Bangkok, and we’ll open up 16
more during 2006. We plan to have 201 showrooms
nationwide by the end of this year, with their facilities
and management elevated to Nissan’s global standard.
Last year was a record for sales in the Thai
market, with a total industry volume of 703,000
vehicles. At the beginning of 2006, the consensus in
the industry was to expect 4 to 5 percent growth.
However, total industry volume has remained virtually
flat. There are three primary reasons. Fuel prices are
high and continue to rise, and interest rates are also
high. Political turmoil is also a factor. The courts
rejected the results of the recent general election, so
Thailand has to go to the polls again. Consumer
confidence has subsequently dropped a bit.
One clear plus for us was the Teana. Just a year
after we introduced it in June 2004, the Teana had
become one of the best sellers among large
passenger cars. Besides being affordable, the
Teana’s fuel consumption makes it attractive in the
fuel crisis. Our previous entry, the Cefiro, had a very
small market presence, but the Teana was
competitive against the segment’s other dominant
models. Since our network was so poor, Teana’s
sales were even more impressive.
KOSAKU HOSOKAWA
President
Siam Nissan Automobile
Co., Ltd.
GEOGRAPHIC EXPANSION
PERFORMANCE
“Shift_”event in Thailand in May 2006 New Teana in “Shift_”event New Teana