Nissan 2006 Annual Report Download - page 28

Nissan Annual Report 2005
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regional markets, our goal is for annual sales of
1,000 units.
Many consumers here want cars but have limited
earning power, so the need for financing is
correspondingly high. Thirty percent of our sales were
financed last year, and that percentage is growing
continuously. Interestingly enough, no manufacturer
currently has a captive finance operation here, largely
because it takes as long as two years to get a
banking license in Russia’s protected finance market.
We worked with Renault and their sales finance
entity, RCI Banque, to develop a dedicated finance
product for Nissan. We began offering this product in
April through a foreign-capitalized local bank,
International Moscow Bank.
The total car and LCV market in Russia is about
1.5 million, and last year foreign brands accounted for
600,000 of those units. Moscow represents roughly
60 percent of the market, and St. Petersburg around
10 percent. Foreign models have driven market
growth the past three years, and we anticipate a 45
percent jump to above 800,000 units in fiscal 2006.
Our original business plan for this fiscal year was to
sell 60,000 units, but we’ve already revised that
upward, and could reach around 70,000 units.
The thing I’m happiest about in 2006 is that our
4x4 lineup is so strong. We now have five models—
Patrol, Pathfinder, Murano, Navara and X-TRAIL—
and all are selling well. The 4x4 segment in Russia is
huge, more than 20 percent of the total market.
Russians prefer a tough, maneuverable vehicle with
good visibility, because six months a year you’re
driving in snow, and even in the cities road conditions
are bad.
This spring we also launched the Note and the
Almera Classic. The Note has already earned fine
reviews. So has the Almera, a compact that is our
highest-volume model in Russia, representing around
45 percent of total sales. It’s produced in Korea by
Renault Samsung Motors—the first Japanese-
branded model supplied from Korea. We’re bringing
the Teana to market in July, built to specifications
applicable to Russia. We have high hopes that the
Teana will help us regain a strong presence in the
premium segment.
We will also officially launch the Infiniti this
October, taking advantage of a luxury market that
grew 70 percent during the first four months of
2006. I say “officially” because the gray market was
already importing Infiniti from the United States.
We’re even stocking Infiniti spare parts because
customers were coming to Nissan dealers for help.
I’m basically quite optimistic about the Russian
market’s future, which is still far from mature. If
oil prices remain at current levels, the economy
should be fine. A big price drop would be a blow,
however, because Russia is so dependent on the oil
and gas business.
Managing the market risks Russia poses requires
a diversified portfolio, including luxury cars, compact
cars and affordable entry-level models. Because of
the market’s great potential, we’re investing in a new
manufacturing facility in St. Petersburg. Construction
begins next spring, and we’ll start production in early
2009 with an initial capacity of 50,000 units.
Currently we’re discussing which models we will
produce, and how many production lines we’ll have.
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