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Nissan Races to Make
Smaller, Cheaper Cars
David Rogers, Bobby Roeckner, Aubrie Stechschulte,
David Warsinskey, Jason Scott
“To sell an expensive- looking car for the
price of no- frill models, and somehow
make a profit on it.”
 Demand of Smaller Vehicles is increasing
because of rising gas prices.
 Drivers trading “Gas Guzzling” SUV’s for
smaller models.

New Mission
Demand is expected to
grow 30% to 27
million vehicles by
2013
 SUV’s demand is
expected to drop 4%
to 10 million vehicles.

This new shift is a challenge that no car
maker has managed to make yet.
 Trucks and SUV’s earn 10%- 20% profit
margins. About $2500- $5000
 Best selling smaller cars earn just 2%3%. About $300 per car.
 Most makers consider to be lucky to break
even on small cars.

Nissan is aiming to make stylish cars with
a starter price of $7000- $10000.
 Eventually reduce price to $5000.
 Nissan is exploring making a $3000 car
with the help of electric rickshaws
makers.

Goals
Nissan’s plan to get under $7000 is
controversial.
 The quality of the car will come into
question.
 Cost structure is said to be not feasible.
 Nissan’s Chief Product Strategist Carlos
Tavares is determined to accomplish this
goal.

Nissan was on the brink of bankruptcy in
1999.
 To turn profits around, they relied on big
models that have high margins in the US.
 At the same time they fell behind in the
world market.
 Last year they only offered one model in
India, which sold only 199 cars.

Nissan used the modeling techniques of
the Renault’s Logan to design the Nissan
Tiida.
 Used simpler parts:
1. Continuous bumper and grill
2. Similar left and right mirrors
3. Less curved windshields
 This results in lower costs

Nissan’s Secret Weapon
Nissan’s Tiida Vs.
Renault’s Logan
Nissan is also moving production to lowcost areas.
 Using more local suppliers in place of
longtime Japanese suppliers.
 This year at the Thailand plant, Nissan cut
imported Japanese parts from 30% to
10%.

Questions?