Nissan 2012 Annual Report Download - page 8

What changes did Nissan implement in response to last year’s disaster, and what did you
learn?
Broadly speaking, we did not fundamentally shift our strategy, plans or business model as a result of last
year’s disasters. Frankly, our experience during these events validated our existing plans—for the most
part, our responses were continuations of strategies, priorities and plans already in place.
In our localization strategy, for example, we have been working to better balance our manufacturing
and sourcing footprint to our sales footprint since the start of the financial crisis in 2008. Our goals at
that time were to reduce foreign currency volatility and cost. Today, we also see benefit in terms of
reducing supply-chain risk arising from production interruptions. These strategies and initiatives are in
various stages of implementation. In fiscal 2010, we began local production and sales of the V-platform
global compact car in Thailand, India, China and Mexico, and in January 2011, we announced a plan to
increase local production of fully built-up units from approximately 69% in 2010 to 85% by 2015 in the
Americas. This includes production in Smyrna, Tennessee, of the new Infiniti JX and Nissan LEAF in
2012, as well as the production shift of the next-generation Rogue from Japan to Smyrna in 2013.
A second example relates to our focus on a strong balance sheet and sustained free cash flow
generation. Our actions in recent years to prioritize free cash flow, eliminate automotive net debt and
reduce reliance on short-term debt greatly helped us to handle last year’s disasters. We now have a
much stronger automotive balance sheet and liquidity position—we continue to benefit from this even
today as we face renewed market volatility related to the euro-zone crisis.
Perhaps the key change we did make as a result of our experience during the disasters of 2011 was
to modify our purchasing process to enhance business continuity plans at the parts level, particularly for
critical components, and to mitigate certain supply concentration risks. These modifications, though, are
more evolutionary kaizen changes rather than fundamental overhauls to our sourcing strategy.
How do you evaluate the first year of the mid-term plan?
The past year has certainly been challenging as we worked to overcome the impacts of the natural
disasters in Japan and Thailand and the unrelenting strength of the yen. Notwithstanding the
adverse environment, I think it is fair to say that Nissan had a solid start to Nissan Power 88, making
progress in all of the key metrics of our business.
In fiscal 2011, Nissan’s global sales reached 4,845,000 units, a 15.8% increase from fiscal 2010
and an all-time record. We achieved another record with full-year global market share of 6.4%, up
0.6 points year on year. Our positive sales performance continued to be geographically broad based
as we enjoyed strong growth in many of the world markets.
Innovation & Power of brand
Year 2 Power 88
Performance Corporate Data Corporate Governance
07
NISSAN Annual Report 2012Message from the CFO
Joseph G. Peter Chief Financial Officer
Nissan wrapped up the first year of its mid-term
business plan with solid performance across
the board. The company is positioned well to
continue pursuing the ambitious goals it set
for itself in Nissan Power 88, and is looking
forward to further growth in market share and
profitability as the plan moves forward.
Message from the CFO
Growing Yet Ready to
Address Any Situation