A
CKNOWLEDGEMENTS:
Firstly we would like to thank our supervisor for providing her invaluable
guidance, comments, suggestions and support throughout this course. Because of her instrumental
and priceless guiding we have learnt new things and were capable ofunderstanding and developing
our new skills. She had made this course more fun, and easy to understand for us by making us do
practical work and team works and has made our conceptualizing skills better.
Secondly we would also like to thank (Sales Manager Commercial
Vehicles Abu Dhabi & Alain) for giving us his precious time and providing us with a detailed
information of the topic that we have been given to work on our case study.
A LOOK INSIDE
BACKGROUND:
A
1954 in Dubai, United Arab Emirates, by Al Rostamani brothers, Abdullah and
Abdul W Rostamani Group, also known as “AWR”, is a privately held company
established in
Wahid Al Rostamani. The Company is headquartered in Dubai and employs over 3,800
professionals. The Group operates a portfolio of 12 companies of multinational brands in seven
diverse sectors: automotive, lifestyle, real estate, information technology, consultancy & training,
logistics, interior fit out, lighting. AW Rostamani is an award winning company by receiving the
Dubai Quality Award in 2014, Dubai Quality Gold Award 2017, and maintains strategic
partnerships with Dubai Shopping Festival.
Arabian Automobiles:
Established in 1968, and are the exclusive distributors of Nissan, Infiniti, and Renault, in Dubai,
and the Northern Emirates. The company operates a large network of showrooms, service
centers, spare parts outlets and a certified pre-owned division across Dubai. The network
includes 13 Nissan showrooms, 6 Infiniti Centers, 4 Renault showrooms, 6 certified pre-owned
car facilities, 16 service centers, 14 spare parts outlets, and 1 24 hour service center.
INTRODUCTION:
NISSAN
(THE POWER COMES FROM INSIDE)
I
n 1994, Nissan was the first Japanese carmaker to establish a regional headquarters in the
Middle East, when it set up an office in Dubai under the name “Nissan Middle East FZE”.
Today, Nissan Middle East operations spans over 22 countries from Azerbaijan to Yemen and
from Turkey to Turkmenistan.
MAXIMA SEDAN
Nissan’s strong presence in the Middle East dates back to 1957 when
the Gulf States were just beginning to reap the
benefits of oil production. Given the challenging
transport infrastructure at the time, the Nissan
Patrol was imported to Saudi Arabia and became
the preferred transportation mode of choice. This
GTR
helped establish the brand’s presence in the region and the 4WD is still a
consumer favorite till date. Nissan Middle East, offers a
comprehensive line-up of models ranging from the ever-popular
Maxima sedan and all-new Kicks urban crossover for the mass
market segment and the legendary GT-R and stunning Nismo Patrol for those with a
penchant for high performance motoring. Some models, including the Nismo Patrol and
the Patrol Super Safari in 3 and 5-door variants are exclusive to the Middle East,
reflecting the enormous esteem in which the Patrol nameplate is held, particularly in the Gulf
States.
PATROL
NISMO
HISTORY:
Nissan key dates from 100 years:
1914: Manufacturing completed on the DAT car, named after investors Den, Aoyama and
Takeuchi.
1932: Vehicle name changed to Datsun.
1934: Corporate name changed to Nissan Motor Co., Ltd. 1937: Datsun Type 15 becomes the
first mass-produced vehicle in Japan.
1937: Datsun Type 15 becomes the first mass-produced vehicle in Japan.
1958: Nissan begins exporting passenger cars to the United States.
1960: Nissan Motor Corporation established in the United States.
1969: The Datsun Fairlady Z (30S) released in Japan.
1979: Nissan Design International, Inc. (NDI) established in the United States.
1980: Nissan Design International, Inc. (NDI) established in the United States.
1981: Cumulative production surpasses 30 million units.
1981: Nissan begins worldwide marketing of vehicles under the Nissan name.
1985: Construction of Nissan Overseas Training Center completed.
1989: Nissan Europe N.V. and Nissan Distribution Service (Europe) B.V.
established in the Netherlands.
1989: Infiniti established as luxury vehicle division of Nissan Motor Company.
1990: Nissan North America, Inc., regional headquarters established in the U.S.
1990: Cumulative production surpasses 50 million units.
1990: The 300ZX (Fairlady Z) wins the 1990 Import Car of the Year award.
1992: Nissan Motor Manufacturing Corporation U.S.A. begins production of the Altima.
1999: Nissan and Renault sign agreement for a global alliance.
2003: Nissan opens Nissan Design Centre Europe in London.
2007: Nissan introduces the world's first Around View Monitor.
2008: Nissan endorsed as an Eco First Company.
2009: Inauguration of new Nissan Global Headquarters.
2009: Nissan Europe begins production at a new plant in St. Petersburg, Russia.
2010: Nissan LEAF introduced as the world's first mass-produced zero-emission, 100% electric
vehicle (EV).
2011: An all-new Nissan Qashqai put into production in Sunderland, UK.
2011: Nissan Power88 mid-term business plan announced.
2011: The Nissan LEAF wins the 2011 World Car of the Year.
2012: Infiniti opens new headquarters in Hong Kong.
2014: Datsun brand to introduce high-quality, accessible vehicles in high-growth markets (e.g.,
Russia, India, Indonesia and South Africa).
This case study is basically about: How Nissan motors identified their problem and planned
their strategies to overcome this problem? What challenges and difficulties did they face?
How did they tackle the situation? Did the strategies and plans work accordingly or not?
What are the actions taken by them below is the detailed information about this case study?
THE VISION, MISSION AND MARKET SHARE OF NISSAN:
Their vision is “Enriching people’s lives” superior measureable values to all stake
holders in
alliance with Renault. issan’s Mission provides unique and
innovative automotive products and services that deliver
The main aim of this motor company is to produce what customers want, in the qualities
customers require, at a price consumer are willing to pay, and at a cost that yields a
profit to the business. That means that being efficient is vital to success. They had a
market share of 80% which they were serving very efficiently.
N
Their main competitors are Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG,
Ford Motor Company, General Motors Company, Honda Motor Company, Tata Motors, Ltd.,
Toyota Motor Corporation, Volkswagen AG and many other automotive companies.
Mostly Japanese cars are more successful and sold in the market of Dubai and Nissan is a
Japanese car and their competitors were also providing Japanese cars like Honda and Toyota. But
Nissan has its well position and good reputation in market. They are well famous in Dubai
market. They have loyal customers because of the quality products they provide.
A
CRISIS:
Whenever a company faces a downfall it is due to external factors or internal factors. Internal
factor are related with any problem with a product of that company or maybe related with
employees or any problem with your management. Whereas external factors are those that are
outside of the company such as environmental factors, governmental factors, a supplier,
customer satisfaction problem or entrance of any new competitor.
A crisis occur when a new company i.e., Hyundai Motor Company which is a Korean brand
entered the market. It entered the market with its ravishing, and cheap products: Kia and
Hyundai. Kia and Hyundai were new products in Dubai market with low costs and good product
quality that targeted people who wanted good quality in low price.
Kia Motors Corporation is part of the Hyundai-Kia Automotive Group, the fourth-largest
automaker in the world. With its worldwide headquarters in Seoul, Korea, and operations in 155
countries, Kia has annual sales in excess of 1.4 million vehicles. A large part of Kia's global
success is an understanding of the importance of producing vehicles that meet the needs of
individual markets. So Kia has research facilities, design centers and assembly operations in
North America, Europe and Asia.
If you compare Korean brands with Japanese brands, there prices are low and consumer prefer
products whose quality is best and available in low prices. In sales you have a target market, so
one is that target market which prefers Japanese brands about 80% market share prefers Japanese
Cars, but 20-25% market was one who wanted a cheap car. Especially in Dubai market, because
in Dubai people come live for 2-5 years, there jobs might end up in Dubai. Passports for Dubai
are not available easily like in Europe or UK. So this 20-25 percent market which wants a cheap
cars. The Korean brands tackled it or targeted it, because of this the Nissan motors faced a
dropdown of sales of about 20-25 percent, which was very alarming for them and they were
think how did this happen?
IMPACT OF KOREAN BRAND ON NISSAN:
Korean brand as compared to Japanese motor were low in cost. An 80% of target market catered
by the Nissan motors were demanding Japanese motors which were high in demand, best in
quality and high prices. Whereas 20% - 25% of the market share demands a cheap product with
good quality because not only upper class customers were targeted but also people who cannot
afford an expensive car and were looking for clemency in cars Until when a Korean company
launched its new products Kia and Hyundai in Dubai, which were providing cheap and best
quality cars.
Customers were attracted towards Korean brand as Nissan as compared to Korean brand was
unaffordable, therefore, customers went for Korean brands. So, if the customers who are visiting
them and expecting a good quality and cheapest car and if they are unable to provide them with
the car of their demand it would be a loss for them and their sales will eventually fall down
because a customer is going empty handed.
PLANING TO GAIN BACK SHARE:
When Nissan motors came to know that their sales were declining. Nissan motors needed to
come up with a strategy to deal with this falling down of sales. The manufacturing process is
done in Japan and then is distributed all over the world. Nissan motors are the exclusive leader of
Japanese cars along with Renault in Dubai. The research department worked hard in order to find
out the reason behind this downfall in sales. So, they find out that a new company that has
entered and is providing automobiles that are lower in cost and decent in quality. They realized
that now they need a brand whose prices are lower, so that that the market share which was lost
could be gained again by Nissan motors. Nissan motors in order to gain back there market share
worked and planned accordingly. In order to find out ways to recapture their market share. After
many plans and strategies done, the sales team and management of Nissan Motors come up with
the best plan, that is to bring up a Chinese brand. The reason was clearly visible that they need to
obtain their target market which was lost. They hit the price conscious market by bringing in the
product of China. So to beat up Korean brand they made a deal with Chinese brand motors
named Morris Garage.
STRUGGLES AND CHALLENGES FACED BY NISSAN
The management went to China, in China there was a brand named MG. MG stands for Morris
Garages. They went there and made a contract with them and became the exclusive leaders of
Morris Garage also. The price of Chinese brand as compared to Korean brands was cheap. To
cover the market share that has slipped from their hands. The 20-25% market share which was
gained by Korean market. So with the help of MG motors they were trying to regain their market
share at least 10-15% share, and therefore they hit that target market which was gone because of
Korean brands. The deal was made to setback the market share and to cover the gap which was
made because of Korean brand.
As their Basic mission is to increase profit and gain market share. So to cover this gap they came
up with another brand for those customers who were price conscious. They hit the target market
which was gone from their hands.
After a thorough research, they found out that because of the new entrance of company there sales
were declining. Every year annual report is provided, they observed that if they were selling 5000
or 500 cars monthly, and now it’s decreasing from 5000 to 4000, then what is the reason behind
it? They discovered that their competitor Toyota were not doing as such progress their sales were
same and haven’t hit them. Then they learned about the new competitor that has arrived. How
much was their sales? So they come to know that there sales were 1000, 1000 or 500 units. That
means that they have identified that this is the reason due to which their sales went down.
So then Mr.Talha Masood as a sales manager along with his team advised their owner in a monthly
meeting with management. As a sales manager they would ask them why sales are down, therefore
the team not only have to provide the reasons for the down sales, but also how to overcome this
problem. Therefore they came up with this idea to bring in the market a product of China to take
over our market share which was lost. Therefore, they came up with the idea of having a car which
they could sell in cheapest price along with a stable quality. They wanted a car which could
minimum cost a customer up till 18000, so that customer can afford this car and we can gain our
market share back.
This was the suggestion of the sales department. In an organization different departments are there
so the quality management department will tell that if they are dealing with the Chinese brands, so
when there will be problem with the spare parts; would they be able to provide the spare parts or
not? Will their workshop managers and their work shop mechanics be able to repair and provide
services and will they be able to handle these cars? Do they have that much of the training and
knowledge available? As they have only dealt with Japanese system and there is a difference
between the Chinese and Japanese systems and spare parts. So for this they have to send their
teams to China for training to learn and understand their ways of handling Chinese car. A lot of
cost was involved in it. When they were trained well, they came back and trained their staffs. The
company has 9000 employees at that time and to train everyone accordingly was a major challenge.
Another problem was the recent value of the car. As we all know that the image of Chinese brand
is always thought to be of low quality. If Nissan recent value of the car is 33000 then after a year
it has value of 25000 or 26000. Whereas if someone is buying a car made in China whose recent
value is 22000, so its recent value after a year is less than 3000 it is like a plastic. So, how to
convince the customer to buy that car. They will say that yes it is cheap and they want to buy it but
when they will look at the quality; they will rethink as all customer of Nissan are quality based
customers, so this was a challenge for them that how they will convince customers that the price
of the car was cheap along with a good quality. As mostly Chinese brands are considered to be of
low quality all over the world. As many customers will be thinking that if there price is low then
their quality is also not good. So these all were the challenges that they have to face, how they have
to train there sales team, what steps they have to take, five year warranty includes which types of
claims they have to keep in that warranty sales. These all were the challenges which they have to
cover in order to meet up their expectations.
As a sales manager MR. Talha Masood proposed this product, it went for approval. After approval
all the departments worked together. How it will affect their company’s reputation. What
challenges they have to face to launch it. When they were bringing in the Chinese product in UAE,
they planned out all aspects of the market; what is the population of UAE?, how many Emirati are
there living as in those who are locales?, how many are there Americans?, how many are
Britishers?, Americans and Britishers are those who don’t prefer Chinese cars mostly they prefer
German brand, American brand or Chiverlot, not even Japanese cars. They were even not the
customers of Nissan. Then they saw that who are the Japanese car customers? They were a mixture
of Pakistanis, Indians, Bangladeshis and some locales. Even when Japanese cars were launched it
was important that they see that how much cars Nissan Micra, Renualt and many others brands
that they have, should have to be brought. They have to see that how many visas are applied and
how many are those who can afford this. Everything was planned. The whole market research was
done. How many are Pakistanis and Indians or Bangladeshis. The research is very important
because it will let the company know that which brand is more preferred and they will order
accordingly.
How we will cover our expenses. We have to open a new showroom for this car. We cannot place
this product in a Nissan showroom or Renault showroom as we have an agreement with them. We
had to open another showroom for this product. New staff has to be hired, new workshops were
opened. So how much investment do they have to do on all this? How much years of investment
will this be? At start nothing is achieved they only have to give to in order to gain. So they have
kept a payback period of 5 years.
SOLUTIONS:
They had a deal with Chinese company. If any losses or any damages will occur then the
responsibility would be of Chinese company. Why? Because they are manufacturing it. It is their
product and their work is to only sale it. So if any damages would occur in future then the
damages and losses will not be Nissan motors, it would be off Chinese. They will cover it and as
they are entering a new market, their name doesn’t exist in Dubai. There are also marketing
expenses. These marketing expenses would be paid by them also, the advertisements, billboards
and ads which are given on radio and advertised on TV. who will share it who will be
responsible for the costs, so these are all the things which different departments have to
recognize.
There is difference between the qualities provided from China. The product that they were
having was A quality product. Therefore they were sure that consumer will buy this car not only
because it’s cheap and A quality but also the brand image that their company has in that market.
Today that Chinese product is well known in that market and not only are they earning revenue
but also gross profit.
The awareness was done through different marketing techniques. Like radio, TV, bill boards,
magazines and also word of mouth were provided attract customers. The cost of this whole
process was covered by the Chinese own brand as this was their own brand. The company was at
beginning stage therefore
Nissan motors cannot afford all of this costs, so Chinese brand have to deal with all the cost
related to advertisements and marketing. With all of these methods, strategies and process
applied Nissan drove back to its original place and gain about 10-15% market share.
WHAT NISSAN HAS ACHIEVED:
The parent company of Nissan Middle East FZE is officially entitled as Nissan Motor Corporation
Limited which traces its origins back to December 1933. It sells more than 60 models under the
Nissan, Infiniti and Datsun brands.
In fiscal year 2016, the company sold 5.63 million vehicles globally, generating revenue of
¥11.72 trillion.
In 2016 Nissan acquired a 34% stake in Mitsubishi Motors, which became the third full member
of the Alliance – a grouping with combined annual unit sales of almost 10 million units a year.
Globally, Nissan employs around a quarter of a million people and, as the maker of the world’s
best-selling electric car, the Nissan Leaf, the company is considered a pioneer and global leader in
the field of zero emission vehicle technology.
Nissan is pushing boundaries in other ways through its concept of Nissan Intelligent Mobility
built on the three pillars of Intelligent Driving, Intelligent Power and Intelligent Integration.
Guided by the vision of mobility for all, Nissan is implementing these innovations by bringing
them from luxury segments to compact high volume models and ensuring everyone has access to
the benefits. Nissan is making cars exciting partners for all of our customers.
Nissan also is currently the Official Global Automotive sponsor of the UEFA Champions League
and the International Cricket Council (ICC) until 2023 delivering exciting and unique experiences
for the fans and stakeholders in the most unexpected way.
In addition, Nissan has a number of sporting ambassadors, including world class footballers
Gareth Bale and Sergio Agüero, official Nissan’s ambassadors for the UEFA Champions
League.
Nissan Middle East’s stellar sales growth in recent years has been recognized at a number awards
from the region’s motoring press, a number of which have been voted for by the motoring public.
Year after year, Nissan products have received accolades for styling, performance, interior quality,
and safety as well as numerous best-in-class awards and recognition for the strength of the Nissan
brand itself within the region.
Nissan has also achieved recognition several times in recent years from Guinness World Records.
Among those records were a Nissan GT-R breaking the world record title for the fastest ever drift
at 304.96 km/h (189 mph) and 30 degrees angle. Equally impressive was the feat achieved by a
Nissan Patrol which broke a towing record by pulling a fully-laden Ilyushin Il-76 cargo plane
weighing 170.9 tons (155 tonnes) over 50 m (164 ft).
RECENT SITUATION OF THE COMPANY:
Nissan Motor, one of Japan's leading automakers, wants to get big by going small. Through its
small-car initiative, the company primarily produces low-cost and fuel-efficient small cars with
standard comfort, safety, style, and performance. Nissan's models include Maxima and Sentra
cars, and Altima and Infiniti upscale sedans, as well as pickups, SUVs, and sports cars. It is also
one of the world's largest manufacturers of forklifts. Renault holds a 43% stake in Nissan Motor
and Nissan has 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.
According to this chart the recent situation of the company is going very well. All there brands
are performing well. They are providing best products, services and responsiveness towards their
demands and other shareholders. The net income shows $5,962,518 billion that they are doing
quite well and are looking forwards in future.
RECOMMENDATIONS:
The company should continue to venture into other emerging markets in the world while
focusing less on the Japanese market by doing this strategy the company can expand its market
share by expanding into other countries. This will increase sales in the company and profit.
Also it should take into account and make contracts with Korean brands too. As they are
renowned in their business and customer are demanding their products so they should also get
some contracts for Korean brands which will also increase their market.
CONCLUSION:
Nissan is the name of superior quality and with its quality products it has achieved loyal
customers. Nissan motor have dealt deliberately with this situation and the results were
marvelous they got their market share back and another Chinese brand was included of which
they were the first exclusive leaders in Dubai. They are doing well and keeping an eye on its
competitors and the market, which will give them more benefits in the future.