Nissan 2006 Annual Report Download - page 36

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Nissan North America, including the Nissan and
Infiniti divisions, sold well over a million cars in
fiscal 2005, which represents 6.1 percent growth
year over year. What’s most impressive about
this was that we didn’t have any new product
launches, and did it in an industry environment
that wasn’t particularly strong.
The total industry volume for fiscal 2005 was around
16.7 million. That sounds pretty good, but for part of
the year our domestic competitors were driving sales
with heavy incentives, which overheated the market.
One of the things we were proudest of is that after
they began pulling back on the incentives we didn’t
have a significant hangover. Sales were a bit soft for
about a month, and then we got right back to hitting
our targets and had a good year.
The fuel price situation has naturally affected
sales. In October and November we had a spike in
gas prices similar to what we’re seeing now. The
Armada and the full-size SUV segment suffered
more than the conventional pickup segment did,
since many people are buying because their work
involves their vehicle.
So, while there was a temporary downturn in
conventional pickups, they came back quicker than
the full-sized SUVs. People are choosing different
and smaller SUVs. You still see that change in the
SUV mix.
With fuel prices rising, we are coming in with a fuel-
efficient, entry-level car. One of Nissan’s key
advantages since the turnaround is that our profitability
allows us to address these segments faster than we
could before—if we even could have before.
During this period we were relocating our
headquarters to Tennessee. While this has been
characterized primarily as an improvement in our cost
efficiencies, there are many other operational
benefits for us. We’re taking it department by
department, and should be in place by the end of
July. Because we’re moving thousands of miles
across the country, not just moving up the street,
people had to make life decisions. However, a
substantial number of our employees decided to
come along. If you look at the marketing and sales
staff, product planning staff, and parts and service
staff—our faces in the field—it’s around 50 percent.
We’re pretty pleased about those figures,
especially when we compare them to what other
companies have experienced when making a move
of this magnitude. We have actively recruited to fill
the vacancies, and because of the strength of Nissan
we received more than 40,000 resumes from people
inside and outside the auto industry even before the
move actually began. I believe we will benefit from
the new blood in a lot of ways.
The U.S. market should remain strong in fiscal
2006, and I estimate the total industry volume will be
between 16.5 and 16.9 million. We’re projecting a
little over 2 percent growth for Nissan and Infiniti
combined. The first six months will probably be flat or
slightly down, but we’ll have new products coming
out virtually every month in the latter half of the year
and should begin showing our year-over-year gains.
Like Nissan is doing globally, NNA is seeking out
segments where we aren’t a factor yet and going
after them systematically. But we have to do it in a
Nissan way and an Infiniti way. That means making
sure customers will welcome the product, and that
the product is unique in some way that blends with
our brand. Versa gives us an opportunity to do this,
and we believe the advantages of that vehicle over
even our Japanese competitors will serve us well in
the marketplace.
It’s the same in every segment. We’ve got
opportunities for line extensions with some of our
products. We haven’t finalized anything yet, but we
think there are areas that present interesting
Nissan Annual Report 2005
34
Putting on the Right Moves for Profitability
NORTH AMERICA
GROWTH MOMENTUM
BRAD BRADSHAW
Senior Vice President
Nissan North America