FREE ESSAY ON NISSAN

NISSAN

Nissan 
Nissan had faced large losses in the past three years. From the financial ratios, we
could see that almost all of the profitability ratios were appeared as the negative
percentage. Which means that the effectiveness of the firm's management of profit in
relation to both sales and investment were low. Also, it had decreasing by each year. 
Nissan seems to misread or ignored the consumers trends in the both Japan and the United
States' markets. The weakest points, and the issues that Nissan lack of are the brand
identity and the product planning. Even though, Nissan had tried to build up the models-
Maxima to compete with Toyota's Camry, and Honda's Accord, but failed to make an impact
because it lacked a strong product identity it's vehicles cannot have the same equipments
and horsepower as other competitive vehicles. The reason for that is because Nissan
afford the large amount of money in the vehicle's investments. "Nissan cannot maintaining
its market share, and had decreased down from 30% of hold to 20% in the Japanese market.
Also, decreased down from 5.6% to only 4% in the United States' market." (Nissan:
Automaker struggling, p.10) The other big problem came with it is overcapacity and
shrinking sales. If the products cannot meet the customers' need, there will happen
overcapacity. Moreover, the company's debts estimated at nearly $30 billion, an amount
roughly equal to its annual sales. 
Compare with other competitors Nissan still have pretty good amount of the sales, not the
best one, but also not the worst one. That means the problem for Nissan is not the
product itself. The problem they face should be the organization problem. Last year 1999,
the Asia economic recession had affect to many of the businesses in the Asia market,
especially the motor businesses. The Japanese companies, Toyota and Honda were both
suffered steep losses because of the economic recession. However, the economy problem had
also affected in Nissan, but that was not the main problem for Nissan. For the GM and
Ford companies that are not the Japanese companies were not having this problem. From the
ratios, we could see that they did not have as much as profit compare to the Japanese
motors, but they are more stable than others. One possible solution to solve Nissan's
problem is to find a strong oversea partner to support Nissan's investments that oversea.

Although Nissan, Japan's second-largest automotive assembler, can make vehicles cheaply,
not enough people want to buy them, and the huge capital investments Nissan made during
the 1980s do not appear to be generating a return that would allow the group to pay down
its colossal debts. Nissan's net debt is equivalent to 66 per cent of Japan's annual
defense spending. Nissan's debt would not be a problem if it were generating the cash
necessary to cover interest and pay down its obligations. Nissan has been cutting its
capital expenditure, a decision that is partly to blame for its lackluster product
line-up and poor sales in Japan. In the US, profits were hit by aggressive discounting
and worse than expected residual values on leased vehicles. Only in Europe is Nissan
profitable.