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Tuesday, 28 June 2011 00:30 - - {{hitsCtrl.values.hits}}
YOKOHAMA, Japan, (Reuters) - Nissan Motor outlined plans to boost both its global market share and profit margin to 8 percent within six years, promising a new vehicle every six weeks on average to woo consumers away from rivals.
The new mid-term business plan, dubbed Nissan Power 88, will focus on the major emerging markets of Brazil, Russia, India and China, as well as newly developing ones in Southeast Asia, Chief Executive Carlos Ghosn said.
“This is the first time that Nissan is starting a (business) plan on the offensive instead of reconstructing something, or defending something,” he told a news conference at Nissan’s headquarters in Yokohama on Monday.
“That’s why we feel very good about (it).”
The market share target would represent sales of more than 7 million vehicles based on Ghosn’s forecast that vehicle sales would reach more than 90 million worldwide in the business year ending in March 2017.
Ghosn has led Nissan through four growth plans since arriving from partner Renault SA in 1999, turning the near-bankrupt company into one of the most profitable in the auto industry.
With corporate restructuring long completed, its balance sheet back in order and technological investments laid out for electric cars and the low-cost “V-platform” subcompact vehicles, Ghosn said the next phase of growth should deliver a leap in sales and profitability.
Last year, Nissan nabbed a record 5.8 percent share of the global car market, with industry-beating growth most notably in China and Europe. It had an operating margin of 6.1 percent.
As part of the new plan, Nissan said it would build a 200,000 vehicles-a-year factory in Brazil as a first step for expansion there.
The plant, which will be the fifth production base for V-platform cars after Thailand, India, China and Mexico, is due to be announced by the end of the year.
“If they can really produce 200,000 cars a year in Brazil, that would be good news,” said Toshihiko Matsuno, senior strategist at SMBC Friend Securities.
“By producing overseas, they can lower procurement and shipping costs, and that’s one way to achieve a higher profit margin.”
Ghosn wants the Renault-Nissan alliance to join Toyota Motor Corp , General Motors Co and Volkswagen AG (VOWG_p.DE) at the top of the global sales rankings to achieve the scale he believes is needed to win as development costs pile up to meet tighter emissions and fuel economy standards.
In addition to its operational ties with rivals from Daimler AG (DAIGn.DE) and Mitsubishi Motors Corp , Nissan and Renault are currently in talks to jointly take a majority stake in Russia’s top car maker, AvtoVAZ -- a move that would place the group at No.3 measured by global sales volume.
Nissan said it would also expand its line-up of the premium Infiniti brand, aiming to take 10 percent of the global luxury car market by 2016/17.
The brand would add three models, including an electric vehicle, and double the number of markets it sells in to 71 in 2016.
Zero-emission cars will also go from niche to volume during the plan, at the end of which Renault and Nissan expect to have sold a cumulative 1.5 million electric vehicles, Ghosn said.
Nissan is counting on electric cars to play a big role in lifting Nissan and Infiniti’s brand value, which has long trailed that of rivals Toyota and Honda Motor Co .
Among other targets, Nissan repeated its goal of grabbing one-tenth of the Chinese market, the world’s biggest. Japan’s No.2 automaker will announce a China-specific mid-term plan next month, Ghosn said.
Nissan also promised a dividend payout ratio of a minimum 25 percent over the six-year plan, compared with 13.1 percent last year.
It also aims to continue reducing total costs by 5 percent a year to achieve the profit margin target, which is based on an assumed dollar rate of 85 yen.
Nissan last week provided rosier-than-expected guidance for sales volumes and profits, defying a setback from the disruption caused by the March 11 earthquake.
