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Andy PalmerLCV Business Unit
Nissan Motor Co., LtdNovember 28th, 2005
Nissan Value-Up Breakthrough Seminar
LCV Business Unit
1. Breakthrough During Nissan Value-Up
2. Definition Of Light Commercial Vehicle
3. Regional Product Line-Up
4. Organization Of LCV Business Unit
5. Six Strategies For Breakthrough
6. Deployment Of LCV Sales Network
7. Progress Report
AGENDA
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“Value-up with sustained performance”
Commitments:
4.2 million units in FY08
Top level operating profit margin
ROIC average 20%
Infiniti Global Tier-1 Luxury Brand
Light Commercial Vehicles
Leading Competitive Countries (LCCs)
Geographic Expansion
1. Breakthrough during NISSAN Value-UpFour Breakthroughs
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AD VanATLAS
CIVILIAN
CARAVAN
CABSTAR
Light Commercial Vehicles
23 Nissan-badged models and 10 DFAC models
1. Breakthrough during NISSAN Value-UpTh
ousa
nd u
nits
0
450
FY00 FY03 FY07*
600
300
150
0
6%
4%
8%
2%
Con
solid
ated
ope
ratin
g m
argi
n
312
187 203 182234
FY01 FY02 FY04
434+40%
3.3%3.6%
-0.5%1.4%
4.0%
8.0%
* Volume is measured from April till March.
Light Commercial Vehicles
(163)
1. Breakthrough during NISSAN Value-Up
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1. Breakthrough During Nissan Value-Up
2. Definition Of Light Commercial Vehicle
3. Regional Product Line-Up
4. Organization Of LCV Business Unit
5. Six Strategies For Breakthrough
6. Deployment Of LCV Sales Network
7. Progress Report
AGENDA
2. Definition of LCV
Vehicles under 8 ton GVW, sold to companies and individuals for transportation of goods and people, primarily in
pursuance of their business.”
Current Models
Light Duty Truck Atlas 10, Atlas 20, Cabstar, Atleon
Van
Medium 2 Van Interstar
Medium 1Van Caravan, Primastar
Small Van Vanette, Kubistar
Light Van AD Van, Expert
Heavy Bus Civilian
Taxi Cedric Sedan, Crew
Pick-Up
Large Pick-Up none
Medium Pick-Up D21
Small Pick-Up B120, Queen Cab
Segmentations
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1. Breakthrough During Nissan Value-Up
2. Definition Of Light Commercial Vehicle
3. Regional Product Line-Up
4. Organization Of LCV Business Unit
5. Six Strategies For Breakthrough
6. Deployment Of LCV Sales Network
7. Progress Report
AGENDA
Sales Volume by Region
0
50
100
150
200
250
300
350
400
450
k un
its
FY04 Actual FY07 Commitment
434
312
+122+39.1%
71
50
146
45
Japan
Europe
DFL LCV
MEX+GOM
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Global LCV product launch (Full Model)
NISSAN 180 NISSAN Value-Up
1 3 00 1 1 31
FY02 FY03 FY04 FY05 FY06 FY071st half 2nd half
Cabstar
1st half 2nd half 1st half 2nd half
AD Van Atlas10 Atlas 20
(LCV P-Up)
(NSPU)
Clipper
Van
ClipperTruck
Kubistar
Primastar
31 0
( ) Opportunity
Launching Plan of New Models
0 2 4
Value-Up NISSAN Post Value-Up
0 24
FY05 FY06 FY07 FY08 FY09 FY101st half 2nd half 1st half 2nd half 1st half 2nd half
0 1 0 3 11
Global LCV product launch (Full Model - Tentative)
+ DFAC
Launching Plan of New Models
2 31
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2004 Today 2007 Value-UP
New
New
New
3-1. Regional Product Line-Up: Japan
New
New
New
2007 Value-UP2004 Today
3-1. Regional Product Line-Up: Europe
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New
New
New
2007 Value-UP2004 Today
3-1. Regional Product Line-Up: US and Mexico
2004 Today
New
New
2007 Value-UP
New
New
3-1. Regional Product Line-Up: GOM
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2007 Value-UP
Nissan
DFL-LCV
2004 Today
3-1. Regional Product Line-Up: China
1. Breakthrough During Nissan Value-Up
2. Definition Of Light Commercial Vehicle
3. Regional Product Line-Up
4. Organization Of LCV Business Unit
5. Six Strategies For Breakthrough
6. Deployment Of LCV Sales Network
7. Progress Report
AGENDA
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4-1. Organization of LCV Business Unit
Total head count: 440Tavares
EVPLCV-BU Head
Palmer VP
•Engineering•Purchasing•Manufacturing
•Marketing•Sales Network
•After sales
•Controller•HR/ Administrative
•Business Strategy
•Program Management
•Product Strategy
•Product Planning
AdministrationEngineering StrategyMarketing Strategy
Program Director Office
Product Strategy & Planning
Engineering Team310 Engineers in totalNissan ShataiNissan Motor Light TruckNissan Europe
LCV-CBU
China
LCV-EBU
Europe
LCV-NBU
N. America
LCV-LBU
S. America
LCV-SABU
S. Africa
LCV-NABU
Middle East
4-2. Global Organization of LCV Business UnitManagement Axis
Reg
iona
l Axi
s
LCV-BU
VP
LTO
CVE
LZO
CPS
LXO
PD
LAO
Controller
LTO
Purchasing
LMO
MD
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1. Breakthrough During Nissan Value-Up
2. Definition Of Light Commercial Vehicle
3. Regional Product Line-Up
4. Organization Of LCV Business Unit
5. Six Strategies For Breakthrough
6. Deployment Of LCV Sales Network
7. Progress Report
AGENDA
Strategy 6Learning Company
COP Volume
Infrastructure (organization, business process, culture, etc)
Strategy 2Cost Reduction
Value Enhancement
Strategy 1New Model
Development
Strategy 4Value Chain Enhancement
Strategy 5OEM Sales
Strategy 3Enter NewTerritories
5-1. Six Strategies for Breakthrough
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5-2. Six Strategies and Major Activities
1. New Model Development? Product planning ? Mid & long term product strategy
2. Cost Reduction/Value Enhancement? Cost reduction? Design-to-cost
3. Enter New Territories? USA, GOM and PRC
4. Value Chain Enhancement? Establishment of LCV sales network in Japan and its
deployment to Europe and GOM? LCV brand enhancement? LCV aftersales enhancement
5. OEM Sales6. Learning Company
? Establishment of global LCV-BU? Change culture and improve work environment? Establish LCV-BU’s financial simulator
Plans and Milestones are Checked with
HOSHIN KANRIMANAGE-
MENT CYCLE
5-2-a. New Model Development
New model pictures are confidential.
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5-2-b. Cost Reduction
Existing models
New models
FY2007LCC
Global Sourcing
Design-to-Cost
Converging Platforms
Concurrent Engineering
GSE Activities
Global Service Efficiency
Leading Competitive Countries
Time Management
Production Efficiency
Creative thinking
G&AParts
Power trains
Manufacturing
Development
5-2-c. Entering New Territories: ChinaLCV-R&D Organization(Alt3)
Centred @ WuhanSatellite @Xiangfan @Zhengzhou
LDT CVE(NML)
<EX;F91A>
LCV CVE(NML)
<EX;NSV>
<EX;DFAC LDT>Support as consignment work
DF brand NISSAN brand
DFAC D+D? people
DFAC EVPFang Chi
R&D GMfrom NML
DFAC+ZNA D+D+ FSA
(from NMLT)? people
DFAC+ZNA D+D+ FSA or STA or Trip
(from NML or NS)? people
CVE Watabe
Management reportProject reportCoordination
DFAC EVPWatanabe
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5-2-d. Value Chain EnhancementLCV Pro Shop Logo
Reception Desk
Dealer signal board
5-2-e. OEM Sales
• OEM is unique and essential to LCV Business- Contributing 39% of Total LCV Volume, 19% of COP
• OEM Seller is more profitable than OEM Buyer- Nissan is currently net OEM Buyer
Models as OEM Seller
0 . 0 %
2 . 0 %
4 . 0 %
6 . 0 %
8 . 0 %
1 0 . 0 %
1 2 . 0 %
1 4 . 0 %
1 6 . 0 %
COP %By Model
Models as OEM Buyer
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5-2-f. Learning Company
We inherited nothing from the past and started to rebuild LCV Business from the scratch.
Everything we learn for success during Value-Up will be passed onto our next generation.
Organization: Global, lean, and flat
Culture: Vibrant and innovative
People: Open, creative, and team-oriented
1. Breakthrough During Nissan Value-Up
2. Definition Of Light Commercial Vehicle
3. Regional Product Line-Up
4. Organization Of LCV Business Unit
5. Six Strategies For Breakthrough
6. Deployment Of LCV Sales Network
AGENDA
7. Progress Report
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6-1. Value Chain Enhancement
1) Launching LCV Pro-Shops in Japan
Policy
? Deploy LCV Pro-Shops in the high demand area
? Set up “Shop in Shop” in the current PV/RV shopsLCV Pro-Shop Standards
? LCV Pro-Shop requires “Dedicated LCV Sales Professional”
? LCV Pro-Shop requires “Demo & Display LCV Vehicles”
? LCV Pro-Shop requires “Specialized Visual Identity ”
? LCV Pro-Shop requires “Specialized Spare Parts Tools”
? LCV Pro-Shop requires “Service Facility for Atlas 20”
? LCV Pro-Shop requires “New After Sales Products”
2) Global Roll-out of Sales Network
Europe, US and GOM
LCV Pro Shop Logo
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Reception Desk
Dealer signal board
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Dealer signal board
Global LCV LOGO
This area can be changed upon market’s situation.
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1. Breakthrough During Nissan Value-Up
2. Definition Of Light Commercial Vehicle
3. Regional Product Line-Up
4. Organization Of LCV Business Unit
5. Six Strategies For Breakthrough
6. Deployment Of LCV Sales Network
7. Progress Report
AGENDA
7. Volume/COP Trend and Forecast
0
50
100
150
200
250
300
350
400
450
500
95 96 97 98 00 01 02P 02A 03 04A 05F 06F 07F
(K units)
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Declining volumeNegative COP
99
-
20
0
50
100
150
200
250
300
350
400
450
500
95 96 97 98 99 00 01 02P 02A 03 04A 05F 06F 07F
(K units)
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Declining volumeNegative COP
TroughDuring NRP
7. Volume/COP Trend and Forecast
0
50
100
150
200
250
300
350
400
450
500
95 96 97 98 99 00 01 02P 02A 03 04A 05F 06F 07F
(K units)
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Declining volumeNegative COP
TroughDuring NRP
RecoveryN180
7. Volume/COP Trend and Forecast
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8.0%
0
50
100
150
200
250
300
350
400
450
500
95 96 97 98 99 00 01 02P 02A 03 04A 05F 06F 07F
(K units)
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Declining volumeNegative COP
TroughDuring NRP
RecoveryN180
Value-Up
434K
Current Forecast Exceeds ESS#4
Re-forecastCommitment
7. Volume/COP Trend and Forecast
434K
7. First Half Results 2005– LCV Value-Up
30,732
58,064
237,380
208,604
171,763
139,745
100,824
339,944
305,484274,833
246,481
219,012
191,496164,575
134,993109,142
79,735
48,70924,118
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1st. - 2nd. - 3rd. - 4th. - 5th. - 6th. - 7th. - 8th. - 9th. - 10th. - 11th. - 12th.
Actual Budget