Nissan 2008 Annual Report Download - page 30

(Units: thousands)
MARKET EXPANSION
Russia
2007 2012
141
>282
2007 2012
198
>400
2007 2012
>200*
2007 2012
>800
458
2007 2012
15>100
* Volume includes Ashok Leyland
Brazil
China
India
Middle East
28 Nissan Annual Report 2008
NISSAN GT 2012
MARKET EXPANSION
Global Market Stretch—Expanding the Right Way
The market expansion drive outlined in our
NISSAN GT 2012 midterm plan focuses on
countries such as China and Russia—where we
already have a 5 percent market share or
greater—and breakthrough markets like India
and Brazil, where we are nowhere now but
rapidly establishing a presence. Then there is
the Middle East, where our market share was 8
percent in 2007 but should be closer to 13
percent because our lineup is so strong.
We sold 458,000 passenger vehicles and
LCVs in China during fiscal 2007. For fiscal
2012, our target is over 800,000 units, or
around 8 percent of the market. To reach
that figure, we are upgrading the efficiency of our
current dealers and expanding the network by 40
percent. Fortunately we are working with a powerful
partner in China, Dongfeng.
In Russia, where we have been operating alone,
our constraints are similar—network development
and coverage. We also need to tweak the lineup. Our
initial strategy was to introduce the Infiniti brand and
set up in metropolitan areas first, because over 50
percent of luxury imports are sold in St. Petersburg
and Moscow. We are already strong in this region as
a result, but with the entry-level cars arriving soon
a rapid expansion of our eastern network is essential.
India is a different proposition. You cannot
produce vehicles outside the country and have
a legitimate presence here because of the 130-
percent duty on imports. We have no local production
facility here yet, but we are building one in Chennai
that will start up in 2010. That factory—and our
arrangement with Ashok Leyland for LCVs, the
Alliance partnership with Bajaj Motors for the
Alliance ultra-low-cost cars, and contract with Hover
for sales and marketing service—will put us solidly in
the market. Our partners understand the market in
ways we do not, and also possess massive
distribution systems. In fiscal 2012, we will be a
major player in India, selling 200,000 units annually.
While India demands a manufacturing-based
solution, Brazil requires a more market-focused
lineup and wider coverage. Our 2007 sales there
totaled just 15,000 units, which represents a
tremendous opportunity.
We have two weaknesses here. First, we lack
an entry-level offering. Second, some cities are
hundreds of miles away from a Nissan outlet. Our
response to the latter will be to quickly expand our
network in partnership with market-savvy Brazilian
entrepreneurs. Bringing in entry-level vehicles will
solve the former and solidly establish the brand. In
fiscal 2012, we plan to be moving over 100,000
units annually and holding 5 percent of the market.
In both Brazil and India we are essentially
outsourcing segments of the Nissan business
process to entities that are extremely competent at
handling them. For example, Nissan has just five
outlets in India. In order to reach our 200,000-unit
target, we are working with Hover to recruit dealers
and develop the network, with the aim of establishing
55 dealers by 2012.