JOHANNESBURG – The Nissan Way, which informs the global company’s mindset and actions has played a key role in the survival of the company, according to Rosslyn-based automotive manufacturer Nissan South Africa (Nissan SA).
Says the company’s corporate and finance director Greg Field: “Nissan places much emphasis on the Nissan Way to ensure that all employees are aligned to best company practice.”
The concept that ‘the power comes from inside’ speaks to three aspects - the customer (focus), value creation (driving force) and profit (measurement of success), adds Field “It permeates the need to be behaving in a certain way to achieve certain objectives. Individuals are measured on an on-going basis to ensure that everyone is living the values as an organisation.”
One of the most crucial mindsets that has assisted Nissan in managing through the global financial crisis has been the need for frugality. “It’s made a big difference in our ability to respond to these difficult times,” says Field, citing bringing stock levels down from 720 000 globally to 420 000 in the space of four months.
The current crisis – a decade after Nissan reversed a position of near-bankruptcy - came at the onset of Nissan’s five-year business plan, GT2012, which was modified to ensure the company’s survival. Retaining the plan’s zero emission leadership and quality leadership objectives, a raft of interventions included clear and strong focus on free cash flow management.
Although the company’s half year results saw Nissan global volumes decline by 14.8%, there are signs that measures to survive the crisis – focusing on cash preservation, recovering profitability and implementing harder Alliance synergies – are returning the company to profitability. They include a stabilisation of the Nissan North America and Nissan Japan operations; new product launches in Asia, Japan, the USA and the Middle East; the launch of a low-cost car in India; strong sales growth in China where a growing market coupled with government support is driving huge demand; and commitment to zero emissions leadership and a global electronic vehicle rollout.
While the strong Yen is detrimental to Nissan Japan’s profitability, it has created opportunities for South Africa which has benefited from increased production of the NP300.
“We’ve had a clear focus on preserving cash with very strong management of stocks and the production build. We’ve been exploring additional synergies with Renault very aggressively and there is a good working relationship between both parties,” he says of the Alliance which he believes has delivered more positive benefits than some of the industry partnerships.
Although Field doesn’t see significant growth for the next 18 months - because of the high household debt to disposable income ratio, which has affected new vehicle sales significantly - he is pleased to report that, despite a year-on-year decline of 18% against a total industry decline of 29%, Nissan SA managed to grow its market share to 8% in calendar year 2009 and is clawing back its third position behind Toyota and Volkswagen.
“Our monthly TIV volume has stabilised, and we anticipate marginal growth in 2010,” predicts Field.
Other impacts affecting future sustainability include a slow recovery of export markets, further deterioration of TIV, foreign exchange fluctuations, consumer spending limitations, accessibility to credit, raw material price increases, fuel hikes, distressed suppliers and a change in the mobility requirement by the market.
However, Field is cautiously optimistic going forward. “The Nissan Recovery Plan is on track and the indications are that we will maintain positive cash flow and profitability.”
No comments:
Post a Comment