Nissan's Fall and Rise

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NISSAN’S FALL AND RISE INTRODUCTION Nissan Motor Co., Ltd. was created in 1933 as the result of a merger between two Yokahama manufacturers. The first vehicles were small trucks and cars to support the growing Japanese automotive market. Today it is one of the world’s largest corporations, manufacturing 3.5 million vehicles, generating sales of 9.4 trillion yen and employing over 182,000 people. Decline of Nissan Nissan started showing signs of decline from the early 1990s. Its market share in the US automobile market declined to 4.7% in 1991 from 5.5% in 1980, while during the same period other Japanese automakers increased their share in the US market from 17.7% to 28.5%. In Japan also, Nissan's market share declined from 34% in 1974 to below 19% in the late 1990s. In 1992 fiscal its pre-tax profits were $615 million - a 50% decline when compared to its 1991 pretax profits. Many analysts were of the opinion that in the early 1990s, the top management at Nissan failed to take notice of changing trends in the customer tastes especially in the US, its biggest export market. Commented David Magee “Management once hailed as progressive and trend-setting was now a part of Japan's old boy network, arrogant and oblivious to market changes and customer needs." According to analysts, over capacity, high production costs, and unrelated investments were major weaknesses of Nissan during the 1990s.. Nissan: Success Story of a Dramatic Turnaround Initially, Nissan had talks with three players - Daimler (Germany), Ford (US) and Renault (France). Nissan was more interested in either Daimler or Ford picking up a stake in the company as both these companies were bigger and had more financial muscle than Renault (which had just re-established itself in 1997). But both Daimler and Ford backed out and Nissan was left with only one possible partner - Renault... Enter

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