Pest Analysis Of Nissan

Nissan Motor, one of Japan's leading automakers, which wants to get big by doing small. Through its small and big-car initiative, the company produces low-cost and fuel-efficient small cars with standard comfort, safety, style, and smooth performance. Nissan's models include Maxima and entra cars, and Altimas and Infiniti upscale sedans, as well as high pickups, SUVs, and sports cars. Its also one of the world's largest manufacturers of forklifts. Renault has a 43% stake in Nissan Motor and Nissan holds a 15% stake in Renault, constituting the Renault-Nissan Alliance. In 2016 the company agreed to buy 34% of Mitsubishi Motors for $2.2 billion.

Nissan is the second largest automaker in Japan after Toyota. Last year, it had sold more than 5.4

The company was founded by Yoshisuke Aikawa in 1934. Nissan did a lot of hard work to established itself as a global automotive leader and formed a Renault-Nissan alliance in 1999. In 2015 alone, Nissan sold just 5.4 million units worldwide, while the whole alliance sold 8.4 million units combined. This allowed the alliance to capture 10% worldwide market share and become the 4th largest vehicle manufacturer as a group, globally.

Nissan sells its cars under 3 different brands: 1 Nissan, 2 Datsun, 3 Infiniti. The company’s main markets are the U.S., China, Russia and Japan.

Strengths

1. Successful Renault-Nissan alliance

In 1999, Renault and Nissan have formed an alliance. Renault holds a 43.4% stake in Nissan and Nissan holds a 15% stake in Renault. The alliance is managed by a joint owned Renault-Nissan BV company, which makes sure that companies pursue the strategies that benefit both Renault and Nissan. The alliance allows both companies to:

• Engage in costly R&D activities;

• Make investments in the new global projects;

• Negotiate better contracts;

• Enter new markets to give a tough fight;

• Share the design, manufacturing and procurement costs for better results

The group has captured 10% global automotive sales and sold more than 8.5 million cars and other vehicles.

2. Focused R&D spending resulting into the best-selling electric vehicle in the world

Nissan has spent ¥531.9 billion of Japanese yen or US$4.42 billion for R&D in 2015. While this is not the largest amount of money spent for R&D between the automotive companies, it is very well focused by Nissan to a few areas, especially electric vehicles (EV).

Figure 2. Nissan R&D expenditure Source: Nissan Annual Report 2016 [2]

Focused R&D spending has allowed the company to produce the best-selling electric vehicle Leaf. In 2015, the company has sold 200,000 units of Leaf and is the leading automotive brand in the EV segment. EV market is expected to grow significantly in the future and Nissan already has an advantage in it.

3. Strong presence in the leading and emerging automotive markets

Nissan through its alliance with Renault and various acquisitions have increased its market share in the global automobile market. The company successfully competes in the U.S. and grows its market share in China, Mexico, Russia, Brazil and other emerging