| Name | Nissan Motor Company Ltd. |
| Industry | Automotive (cars, commercial vehicles) |
| Founded | 1933 |
| Headquarters | Nishi-ku, Yokohama, Japan |
| CEO | Makoto Uchida |
| Revenues | $74.1 billion (2020) |
| Profit (Loss) | ($1.42) billion (2020) |
| Competitors | Toyota Motor Corporation, Honda Motor Company, Hyundai Motor Company, Tata Motors, Ltd. |
Company Overview
Nissan Motor Company Ltd, commonly known as Nissan, is one of the leading Japanese brands in the automotive sector. Founded on December 26, 1933, the company established its headquarters in Nishi-Ku, Yokohama, Japan, and has been in the automotive industry ever since. Nissan predominantly deals in manufacturing and selling automobiles and their parts while also providing financial sales services. Nissan is divided into two segments; Automotive and sales finances. The company’s automotive segment mass-produces and sells minivans, electric vehicles, light cars, microbuses, compact cars, trucks, commercial automobiles as well as their parts. On the other hand, the sales finance sector of the company deals with businesses regarding sales finance and leasing properties to promote the automobile segment of the company (Reuters, 2021).
Table of Contents
Nissan Strengths 2021:
- Electric Vehicles.
Nissan has manufactured electric vehicles, one of them being the Nissan Leaf which has been around for almost a decade and still holds the 5th position amongst the best-selling electric cars of 2021. In the electric vehicle market, it is regarded as one of the most desirable products. For example, in 2021, the company was able to sell 7,729 units (White, 2021). Other than Nissan Leaf, Nissan also provides a wide range of electric cars, for instance, Nissan ARIYA, Nissan E-NV200 COMBI, etc. (Nissan, 2021a). Introducing such variety in electric cars adds to Nissan’s innovative product portfolio and makes a place for Nissan with its competitors in the future years. - Renault-Nissan-Mitsubishi Alliance.
In automotive partnerships and collaborations, the Renault-Nissan-Mitsubishi alliance is regarded as a top-tier collaboration between French and Japanese companies, leading the alliance as the top seller. The Alliance took its recent step in January 2021, which resulted in the profit of all the companies involved by benefiting from the company’s strengths (Nissan, 2021b). Successful alliances like these allow the company to expand its target market, increasing sales and profit.
- Environmentally Friendly Policies and Operations.
There is increasing pressure coming from government and local communities around the globe on the manufacturing and automobile industry about their unsafe practices, which impact climate negatively. Hence it is significant for automobile companies to engage in environmentally friendly activities. Nissan has always been environmentally cautious; in 2002, they launched the Nissan Green Program (NGP) and also planned on electrifying all their vehicles by 2030 (Nissan, 2021c). In this context, in January 2021, Nissan set its goal that by 2050 it will reach carbon neutrality. This step taken by Nissan will help in strengthening its image as an environment empathic brand and add to its (CSR) activities. Such an image will increase brand loyalty and result in more customers and profit in the coming years.
Nissan Weaknesses 2021:
- Low net worth.
According to Macro trends (2021), the net worth of Nissan is $21.304 billion. This, compared to its competitors, is low. Toyota, another Japanese brand, is valued at $248.309 billion, and Honda is valued at $52.972 billion. This shows that Nissans’ market value compared to its competitors is weak, resulting in such differences in net worth. - Renault-Nissan Alliance.
Often regarded as a strength, Nissan’s alliance with the French brand Renault is also a setback. Renault owns 43% of Nissan, and in turn, Nissan only owns 15% of Renault, making this a partnership in which the latter party is benefitting more. Even though this partnership has helped Nissan gain a larger market share, it is quite off-balanced. Consequently, making the partnership equally a weakness of Nissan. Furthermore, Renault plans to acquire more control of Nissan in the coming years, potentially leading to a weaker position of Nissan in the industry (Choudhury, 2019). - Product Recalls.
Sentra Sedan models Nissan has recalled 2020-2021 because the inner tie rods of the vehicle are bent, which will cause difficulty in steering the car. A total of 138,736 vehicles were recalled to fix this issue. However, Nissan has managed to identify the problem in the developing process which caused this malfunction. This mass number of recalls damages the company’s reputation and profits in the automobile industry and will also result in a loss of customer loyalty (Hoffman, 2021). - Factories shut down.
Amidst the pandemic, Nissan has had to deal with the economic issues; therefore, there have been business fallouts. These fallouts led to the shut of factories in emerging markets of Africa, the Middle East, and India (Associated press, 2020). This has already caused the company to lose a great deal of business in these sectors, and the predictions for the coming years do not look good.
Nissan Opportunities 2021:
- Emerging Markets.
Nissan has operations in several countries such as South Africa, China, Japan, Mexico, Middle East, United States, and Europe (Nissan, 2021d). These economies are becoming car-dependent and provide a great market for Nissan for earning abundant profits. However, it could also open or restart its production facilities in India and establish factories in Bangladesh. - Autonomous Cars.
Self-driving cars is the new upcoming trend with innovative engines presented by Tesla, Google, etc. In this realm, news reports have published how Nissan and Renault’s alliance is investing in such technology to increase their market share (LeBeau, 2019). However, considering that Nissan already lacks control in that particular alliance, it is recommended that the company initiate its research and development projects to introduce self-driving cars under Nissan alone. This way, the company can again have a chance to gain its position in the alliance back and maintain its product portfolio with the ongoing market trends.
Nissan Threats 2021:
- Competitors.
Nissan faces plenty of competition in the automotive industry from Toyota, Honda, etc. These stats portray a major difference in the sales of Nissan and its competitors. In 2021, the sales of Toyota were 5.005 million units (Toyota, 2021) and sales of Honda were 4.5million (Carlier, 2021), whereas Nissan only sold a total of 280,282 units (Automotive world, 2021). This is a significant threat to Nissan as it inhibits the company from establishing a prominent footprint in the automotive sector. - Rising Raw Material and Labor Costs.
Recently, the news reports have indicated that Nissan might increase the prices of its automobiles, given that the company has high incurring expenditures from operations and other fixed labor costs (Mint, 2021). The prices of automobile components parts are also rising. Further,it is indeed true that Nissan is facing high labor costs in its home country, as well as in other market segments (The Japan Times, 2021). However, pushing the price towards customers might lead to a further reduction in demand for Nissan’s automobiles.
Nissan SWOT Analysis Conclusion:
In conclusion, Nissan Motor Company Ltd is a company that has managed to stay prominent in the automotive industry amidst competitors Ford, Hyundai, Volkswagen, Toyota, Honda, etc. The company has done this by focusing and building on its strengths by being environmentally cautious for a long time and investing in electric cars, which is already seen as a profitable market. However, recent product recalls and factory shutdowns have affected its reputation, which can be countered if they start capitalizing on upcoming opportunities such as operating in emerging markets. As a result, it will strengthen the company’s reputation and give it a strong name while minimizing the threats posed to Nissan.
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References:
- Associated Press. (2020). Business fallout: Nissan factories to shut in Africa, India. KPCR.
- Automotive World. (2021). Nissan Group reports second-quarter 2021 U.S. sales. Automotive World.
- Carlier, M. (2021). Global hybrid electric vehicle production from 2015 to 2025. Statista.
- Choudhury, S. (2019). Nissan is reportedly set to cut more than 10,000 jobs worldwide. CNBC.
- Hoffman, C. (2021). Nissan Recalls Nearly 139,000 Sentra Sedans for Bent Inner Tie Rods. Car and Driver.
- Japan Times. (2021). Panel agrees to propose record hike to Japan’s minimum wage. The Japan Times.
- LeBeau, P. (2019). Waymo just joined a deal to make self-driving cars for use in France and Japan. CNBC.
- Macrotrends. (2021). Nissan Motor Net Worth 2006-2021 | NSANY. Macro Trends.
- Mint. (2021). Nissan Motor to Raise Prices as Input Cost Rises. Mint.
- Nissan. (2021a). Electric Cars – The new way to drive. Nissan.
- Nissan. (2021b). The Alliance – Sustainability Report. Nissan Global.
- Nissan. (2021c). Sustainibility Report 2021. Nissan.
- Nissan. (2021d). A Network of Innovation. Nissan.
- PHYS (2019). Renault-Nissan-Mitsubishi remains top car group. PHYS.ORG
- Reuters. (2021). Nissan Motor Co Ltd (ADR). Reuters.
- Toyota. (2021). Sales, Production, and Export Results for the First Half of 2021. Toyota Global.
- Wagner, I. (2021). Worldwide number of automobiles sold by Honda Group from FY 2002 to FY 2021. Statista.
- White, A. (2021). 12 Best-Selling Electric Vehicles of 2021 (So Far). Car and Driver.
