Nissan Swot Analysis

Topics: Automotive industry, Renault, Ford Motor Company Pages: 6 (1773 words) Published: March 6, 2010
Nissan Motor Company Ltd (Nissan) is Japanese Company engaged in the automotive industry worldwide. The Company, including its associated brands, designs, produces and sells more than 3.7 million passenger cars and commercial vehicles in more than 190 countries. The Company is engaged in manufacture and sale of passenger automobiles, as well as the supply of automobile parts. Major overseas market for Nissan included Europe, North America, Africa, New Zealand and China.

The Company's major production sites are located in Japan, with additional facilities located in the United States, Mexico, the United Kingdom and Spain. In 1999, the Company established an alliance with Renault SA, a French automobile manufacturer. The alliance is designed to achieve profitable and balanced growth for the two partners through the creation of a bi-national group.

Nissan (Japan) is amongst the top three car manufacturers in Japan and the top five in the world. As well as its cars, pickups and sports utility vehicles, the company also has an interest in heavier vehicles and equipment such as vans, trucks, buses, components, aerospace, industrial machinery and marine equipment.

The SWOT Analysis of Nissan is as follows: -

Strength: -

1) Global Brand: - According to business Week Global Brand Scorecard Nissan is the fastest growing automotive brand. Nissan’s brand equity was valued at $3,108 million in 2006. Some of the company’s passenger car models include Maxima, Sentra, Altima, Versa, Z Roadstar and Z Coupe. Some of its truck models are Quest, Armada, Pathfinder, Murand and Xterra.

Brand strength provides competitive advantage that can offset the increasing competition. Over the last five years company has establish the global brand by focusing on the brand pyramid and dynamics that caters the silky design, the vibrant experience, the interplay between serenity and driving pleasure has reached a high level of alignment and consistency. That makes it easier to communicate about the brand and specific features of its model.

2) Global Financial position: - One of the Nissan key strength is its Global Financial Position. Five year financial highlights are shown below (figures are in USD Millions): -

Source: Nissan annual report 2005-06

From this table we are able to analyze Nissan’s financial position in 3 key areas – profitability, solvency and liquidity. Return on Assets (ROA) is a key indicator of profitability and thus, overall financial position and management. Since 2000, Nissan has a ROA of 5 % which is quite high for a company of such a large size. Furthermore, Nissan has had a Long Term/Assets Liabilities Ratio of between 0.19 and 0.22. This is an excellent figure and indicates that Nissan will be able to withstand tough economic conditions.

One final indicator of the strong financial position held by Nissan is its overall growth. From FY02 to FY06 inclusive, Nissan experienced an annual average of 13.8% revenue growth, 11.33% net income growth and 15.62% asset growth. These figures strongly support the argument that Nissan globally is in a strong financial position and will be able to provide Nissan Europe with backing to compete in the saturated European market.

3) Renault-Nissan Alliance: - The alliance has provided advantages to both companies. They can move into new markets faster and with lower costs because they don't have to build new plants. (Renault builds cars in Nissan's Mexico plants and Nissan uses Renault's Brazil plant and distribution networks) The companies are collaborating on building common platforms, components and engines, and each company leads engine design in their area of expertise--Renault in diesel and Nissan in gasoline. And they have increased purchasing power because they buy components for six million cars not three as will be in the case of Nissan alone. The alliance has so far boosted the profitability, market capitalization and sales in 192 countries...
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