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Nissan

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									Nissan Races to Make
Smaller, Cheaper Cars
 David Rogers, Bobby Roeckner, Aubrie Stechschulte,
                     David Warsinskey, Jason Scott
 “To sell an expensive- looking car for the
  price of no- frill models, and somehow
  make a profit on it.”
 Demand of Smaller Vehicles is increasing
  because of rising gas prices.
 Drivers trading “Gas Guzzling” SUV’s for
  smaller models.




New Mission
 Demand is expected to
  grow 30% to 27
  million vehicles by
  2013
 SUV’s demand is
  expected to drop 4%
  to 10 million vehicles.
 This new shift is a challenge that no car
  maker has managed to make yet.
 Trucks and SUV’s earn 10%- 20% profit
  margins. About $2500- $5000
 Best selling smaller cars earn just 2%-
  3%. About $300 per car.
 Most makers consider to be lucky to break
  even on small cars.
 Nissan is aiming to make stylish cars with
  a starter price of $7000- $10000.
 Eventually reduce price to $5000.
 Nissan is exploring making a $3000 car
  with the help of electric rickshaws
  makers.




Goals
 Nissan’s plan to get under $7000 is
  controversial.
 The quality of the car will come into
  question.
 Cost structure is said to be not feasible.
 Nissan’s Chief Product Strategist Carlos
  Tavares is determined to accomplish this
  goal.
 Nissan was on the brink of bankruptcy in
  1999.
 To turn profits around, they relied on big
  models that have high margins in the US.
 At the same time they fell behind in the
  world market.
 Last year they only offered one model in
  India, which sold only 199 cars.
 Nissan used the modeling techniques of
  the Renault’s Logan to design the Nissan
  Tiida.
 Used simpler parts:
             1. Continuous bumper and grill
             2. Similar left and right mirrors
             3. Less curved windshields
 This results in lower costs




Nissan’s Secret Weapon
              Nissan’s Tiida Vs.
Renault’s Logan
 Nissan is also moving production to low-
  cost areas.
 Using more local suppliers in place of
  longtime Japanese suppliers.
 This year at the Thailand plant, Nissan cut
  imported Japanese parts from 30% to
  10%.
Questions?

								
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