...Ghosn Bets Big on Low-Cost Strategy African Plant Underscores Race to Head Off Chinese, Indian Car Makers TANGIERS, Morocco -- The plan by French automotive group Renault SA and Japanese partner Nissan Motor Co. NSANY -0.75% to build a joint assembly plant in this North African port city highlights the accelerating race among global car makers to redefine the meaning of "low cost" for the auto industry, not just for emerging markets but for the developed world as well. With the sort of flourish that has become his trademark, Renault-Nissan Chief Executive Carlos Ghosn flew to Tangiers Saturday, where, in a carpeted tent overlooking the Mediterranean Sea, he signed the draft agreement with Morocco Prime Minister Driss Jetto for the future Tangiers plant. If Renault-Nissan and the Moroccan government can agree on certain key details, the two companies will invest as much as €1 billion ($1.36 billion) to erect one of the largest auto-production facilities on the African continent, designed to feed low-cost cars and trucks to showrooms in Europe, Asia and North America. The plant's initial capacity of 200,000 vehicles per year will increase gradually to 400,000 a year, including variants of Renault's low-cost Logan car line and a new range of $10,000 trucks under development at Nissan, the companies said. The plant is slated to open during the second half of 2010. Mr. Ghosn said moving into the no-frills segment represents a tough challenge. He set a high standard for...
Words: 1519 - Pages: 7
...The Renault and Nissan alliance Renault, the oldest automaker in France, had been nationalized by Charles de Gaulle in 1945. In the late 1990s, its financial performance had been buoyed by a strong European car market, several popular new models, and extensive cost-cutting. So it was time for Renault to find the partners again since merging with Swedish automaker Volvo had failed due to not match objective; internationalization. In 1997, the Asian financial crisis was like the opportunity for Renault. At that time, Nissan, a Japanese company with a famous bureaucratic management style, was a company on the verge of collapse. It faced with the loss of market share and poor returns. For worse, it was in debt and was under the pressure from the bank. These brought Renault and Nissan to ‘The Renault-Nissan Alliance’ in March 1999. The objectives of Renault are to improve the quality and internationalization. Nissan’s objectives are reduce the cost and the debt. In practice, they formed cross-company teams to study and realize synergies across the major functional areas of both firms since the alliance. They combined two nations together. CCTs had to prepare a report on their progress to the Alliance Coordination Bureau (CB) which functions were providing specialized technical advice, trying to resolve companywide policy issues that went beyond a single CCT, and trying to resolve specific conflicts within the CCTs in a given area. CB must make sure decisions are being taken on time...
Words: 987 - Pages: 4
...TUTORIAL 8: CARLOS GHOSN: LEADING FOR GLOBAL SUCCESS AT RENAULT-NISSAN ● Summary [Identifying key issues] ■This case discusses Japan’s number-two automobile manufacturer,. (www.nissan-global.com), its CEO Carlos Ghosn, his leadership style, and the company's strategy. The questions focus on these issues and whether the strategy of Renault-Nissan is global or multinational. The case provides a good example of a firm that uses a global, integrated strategy for its worldwide operations. It is also a good example of a large company with ambitious goals to produce high quality products and sell them on every continent. BACKGROUND ■ Based in Tokyo ■ 2009- Sales were nearly $90 billion ■ Management planning to launch 48 new car models ■ A few years ago- on the verge of bankruptcy. ■ Renault- The French automaker took a 44 percent stake and installed Carlos Ghosn as Nissan’s CEO ■ Dramatic turnaround- Ghosn returned Nissan to profitability and became a celebrity in Japan ■ Ghosn- Born in Brazil, raised in Lebanon, and educated in France, he is a charismatic leader who speaks four languages and is idolized for saving one of the world’s premier car companies. ■ Ghosn closed inefficient factories, reduced Nissan’s workforce, curbed purchasing costs, shared operations with Renault, and introduced new products. NISSAN’S ORGANIZATIONAL CULTURE ■ Ghosn cut through antiquated thinking, defying Japan’s often bureaucratic and clubby business...
Words: 2174 - Pages: 9
...Renault/Nissan: The Making of a Global Alliance Prepared By: Jason Park & Isaac Hattem Why is Renault seeking a strategic partner? What are Renault’s strengths and weaknesses in seeking a partner? The most successful strategic alliances are between companies with complementary strengths and weaknesses. Renault has been building cars since it was started under the name Socié Renault Frè té res. Louis Renault, his brothers Marcel and Fernand, and his friends Thomas Evert and Julian Wyer founded it in 1899. Since the beginning they have been an industry leader in small car designs, combining functionality with style. In 1998 Renault was the world‟s ninth-largest car manufacturer with 4.3% of the market. During the 90‟s globalization was occurring in all industries including the automobile industry. Major manufactures were seeking strategic alliances and mergers as ways to increase market share, reduce costs, and improve productivity. Renault has been an established French automaker since it started producing cars in 1897. Like many other companies Renault has been looking to expand into the Asia for its large potential market. They felt that the best way to do this was through a strategic alliance. Renault has been looking for another automobile manufacturer to peruse a possible alliance with since the early 90‟s. From February 1990 to December 1993 Renault attempted a merger with Swedish car manufacturer, Volvo. It was expected that the merger would go through, than in December...
Words: 8119 - Pages: 33
...BRIC Spotlight Report ____________________________________________________________ _________________ Automobiles Sector in India: Fast Growth October 2010 Fast Facts India is the second fastest growing automobile market in the world after China. Passenger vehicle production during the period April 2010 to August 2010 increased by nearly a third from a year ago. For the year ending March 2011, passenger vehicle output is expected to exceed 2.5 million. India is emerging as a major production base for small cars, with output expected to reach 3 million units by 2016. The country is building a reputation in designing and manufacturing low cost cars. Production of trucks and buses increased by nearly 66% between April 2010 and Aug 2010. An expanding highway network and overall economic growth is pushing up demand. India is the second largest market for motorcycles worldwide. Output of over 4.5 million units was registered during April 2010 – Aug 2010, marking growth of over 27%. The auto parts industry is also scaling up, as global car manufacturers are increasing their component sourcing from India, due to cost and engineering competencies. Competition is intense as most global firms have entered the market. O nly three decades back, Indian car buyers had just two models to choose from. Both were local reproductions of European models that had disappeared from the western markets soon after World War II. Irrespective of market demand, manufacturing capacity was...
Words: 3497 - Pages: 14
...Supply Structure of the Automative Sector 8 a) Sector Highlights: 8 b) Motor Vehicle Production and Sales in Turkey 9 c) Concentration of the sector 10 d) Chacteristics of products, elasticies, characteristics of consumers, entry and exit barriers, resources and capabilities of the firms, 11 3) Government Policies 12 4) International Competition 14 a) Passenger Car and Commercial Vehicle Market Import 14 b) Vehicle Market Export 14 5) Analysis Of FORD OTOSAN A.Ş. 15 a)Company Profile: 16 -Shareholders: 16 - Headquarter & Branches, Foreign Country Operations: 16 -Field of Operation 17 -Strategy of the Company: 17 -Financial indicators of the company 18 -Products, Export-Import and Domestic Market Performance: 19 -Research and Development: 19 6-Ratio Analysis: 21 7. Conclusion 23 8.Appendix 24 1) Historical Development and the Importance of Automative in Turkish Business Enviroment a) History The development of the Turkish automotive sector has been closely related to the market policies implemented by the Turkish government. The protected market regime, prevailing since the foundation of the Republic, had come to end during the 80’s. The assembly of the commercial models of Ford, Chrysler, BMC, Mercedes-Benz and Deutz started under licence, during the 60’s. In 1970's, passenger car production of FIAT and Renault began. During these years, the development of...
Words: 8586 - Pages: 35
...RUSIA : A HUGE EMERGING CAR MARKET ISOLATED FROM OIL CRISIS High oil prices are causing pain for carmakers in America as people there are sacrificing their fancy for pick up trucks and sport-utility vehicles for more frugal small vehicles. In May 2008, General Motors announced a 30 percent fall in car sales, compared with a year earlier; Ford posted a 19 percent drop, and sales of its F-150 pick up fell behind Toyota’s Camry and Corolla for the first time. But far in Russia, the high oil price is powering expansion of the market rather than painful restructuring. Thanks to abundant natural resources, Russia has been witnessing a rising economy since decade ago. With nearly doubled and steadily rising real disposable income, cars are no longer unaffordable for many Russians. Currently, car ownership in Russia is still low at about 200 per 1000 people, compared with the over 500 in most of Western Europe and the around 800 in American (even in other former communist countries in Central Europe, the number is between 300 and 350). But the car market there is expanding : in 2007 Russia's sales of new cars grew 36 percent by volume and 57 percent by value; sales of passenger vehicles exceeded 2.7 million. According to analysts, Russia could out strip Germany as Europe’s biggest market by 2008, with sales reaching around 3.3 million; by 2012 Russians will be buying more than 5 million new cars a year, of which nearly 90 percent will be foreign brands. However, all of the growth has...
Words: 987 - Pages: 4
...Ford and the world automobile industry in 2012 At the beginning of 2012, the Chief Financial O cer of Ford Motor Company, Lewis Booth, was reviewing his nancial forecasts for 2012-16. Ford’s turnaround since the crisis of 2007-8 had been remarkable. After a loss of $14.7 billion in 2008, Ford earned net pro ts of $6.6 billion in 2010, and it looked as though Ford’s pro t for 2011 would exceed this. The recovery had been much more rapid than Booth had expected. Ford’s business plan of December 2008 projected that it would not break even until 2011.1 Booth attributed the speed of the turnaround to three factors: rst government measures in North America and Europe to stimulate demand through incentives for scrapping old cars and subsidies for purchasing new, fuel-e cient models; second, the recovery of demand in several major markets including China, India, Brazil and the US; third, Ford’s own restructuring. The “One Ford” transformation plan introduced in 2006 had closed plants, cut Ford’s workforce from 295 000 at the beginning of 2006 to 148 000 at the end of 2011, sold Jaguar, Land Rover and Volvo and a large chunk of Mazda; integrated Ford’s global activities; and accelerated product development including an increasing emphasis on smaller cars. Despite these successes, Booth looked to the future with much trepidation. Ford’s performance over the next ve years would depend on three main factors: Ford’s ability to continuing success with its One Ford strategy, the state of the...
Words: 6558 - Pages: 27
...“Renault-Nissan Alliance” Case Report "I pledge on my honor that I have not given or received any unauthorized assistance on this assignment/ examination." 1.What are the strategic reasons for the Renault-Nissan alliance? Strategic alliances are voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services (Rothaermal 244). The most common reasons firms enter into strategic alliances are – * To strengthen competitive position * To enter new markets * To hedge against uncertainty * To access critical complementary assets * To learn new capabilities (Rothaermal 245). The Renault-Nissan alliance was not an exception to the aforementioned reasons. In the late 1990s, Nissan was falling apart, with consistent drop in its auto sales and poor returns. It had been losing market share for 27 years in the Japanese market and by 1999 it had about $20 billion in debts. Analysts attributed Nissan’s bland styling, infrequent model changes, high manufacturing and parts costs, and bureaucratic decision-making to its poor performance. At the time when Nissan was looking for somebody to bail them out of their financials crisis and put the on the profits, Renault came to their rescue. Renault was a maker of small- to medium-size cars with consistent, but slim profit margins. It sold 85% of its automobiles in Western Europe with third of them in France. Renault had...
Words: 2516 - Pages: 11
...Capstone Project Ford Motor Company Submitted By Anurag Vats Ford Motor Company Company Information and Core Activities Ford Motor Company (Ford), incorporated in 1919, is a producer of cars and trucks. The Company and its subsidiaries also engage in other businesses, including financing vehicles. The Company operates in two sectors: Automotive and Financial Services. Its Automotive Sector includes Ford North America, Ford South America, Ford Europe and Ford Asia Pacific Africa. Financial Services includes Ford Motor Credit Company and Other Financial Services. Ford North America includes the sale of Ford- and Lincoln-brand vehicles and related service parts in North America (the United States, Canada and Mexico), together with the associated costs to develop, manufacture, distribute and service these vehicles and parts. Ford South America includes the sale of Ford-brand vehicles and related service parts in South America, together with the associated costs to develop, manufacture, distribute and service these vehicles and parts. Ford Europe includes the sale of Ford-brand vehicles and related service parts in Europe, Turkey and Russia, together with the associated costs to develop, manufacture, distribute and service these vehicles and parts. Ford Asia Pacific Africa includes the sale of Ford-brand vehicles and related service parts in the Asia Pacific region and South Africa, together with the associated costs to develop, manufacture, distribute and service these vehicles...
Words: 4836 - Pages: 20
...Individual Analysis Paper Chairman and CEO of Nissan and Renault – Carlos Ghosn Chao Ru chao.ru@laverne.edu University of La Verne Graduate School of Business BUS 586 – CRN 1354: Leadership for the Future Professor John C. Sivie June 28, 2012 I. Table of Contents I. Table of Contents 2 II. Background and Award of Carlos Ghosn 3 III. Important Contributes for Nissan from Ghosn 4 IV. Doing the Right Things of Carlos Ghosn 5 V. Learn from Carlos Ghosn 7 VI. References 9 Chairman and CEO of Nissan and Renault – Carlos Ghosn II. Background and Awards of Carlos Ghosn Background Information of Carlos Ghosn: Carlos Ghosn is the president and CEO of Nissan Motor Co. Ltd., a global automotive company with 180,000 employees and $83 billion in revenue. He joined to Nissan in June 1999 as its chief operating officer. And then, he became Nissan’s president in June 2000, and also became the chief executive in June 2001. Carlos Ghson is also the president and CEO of Paris-based Renault, SA which was named in May 2005. Both companies together produce more than one in 10 cars sold worldwide. He is also Chairman and CEO of the Renault-Nissan Alliance, the strategic partnership overseeing the two companies through a unique cross-shareholding agreement (Wikipedia, 2012). Currently, he is not only the president and CEO of Nissan and Renault. He also serves on the board of director at Alcoa Automotive, Inc and Closure Systems International, Inc. He serves these...
Words: 2957 - Pages: 12
...Shaun Mains Alvernia University The Ford Motor Company is an American based automobile manufacturer that was founded in 1903 by the late Henry Ford. The company pioneered the early integrated moving assembly line, fought and beat early gasoline powered automobile patents, and even survived the Great Depression. Today, Ford is the fifth largest automobile manufacturer in the world, based on sales, and is the largest family controlled company in the world (History). Henry Ford, along with 11 other investors, founded Ford Motor Company on June 16th 1903 (History). In its early years the company produced the Model A, S, K and most notably, the Model T. The popularity of the Ford Model T from 1908 through 1913 is what fueled the development of the integrated moving assembly line. The assembly line simplified the manufacturing process and made mass production possible (Company). The chassis assembly line alone went from 12.5 hours to produce a chassis, down to 1.5 hours (Company). The Ford Model T was a huge success for the automobile manufacturer. The vehicle was priced significantly lower than the competition largely in part to Henry Ford’s insistence on building integrated manufacturing plants and the utilization of the integrated moving assembly line. The company’s main goal of the time was to build a vehicle for the everyday American, and the company priced their vehicles accordingly. This achievement allowed even the poorest of Americans to purchase a vehicle, helping...
Words: 700 - Pages: 3
...dossier of article extracts and answer the final questions. 1.- “The $10 billion man” Feb 24th 2005, The Economist Having turned round Nissan, Carlos Ghosn is about to run Renault as well It is said that he could add $10 billion to the market value of Ford or General Motors with a stroke of his pen. But Carlos Ghosn is not about to sign up as chief executive of either firm. Instead, in May, he will become the boss of Renault, France 's second-largest carmaker, while continuing to head Nissan, Japan's number two car firm. To ease the transition, this week he named Toshiyuki Shiga as Nissan's chief operating officer. Although Renault and Nissan have cross-shareholdings and a deep alliance, their relationship deliberately stops well short of outright merger. Perhaps that is why it has been so successful, avoiding the integration pain that has marred, for instance, DaimlerBenz's takeover of Chrysler. In his book, “Shift: Inside Nissan's Historic Revival”, published in English last month, Mr Ghosn says that the strength of the alliance “can be found, on the one hand, in its respect for the identities of the two companies, and on the other, in the necessity of developing synergies.” Certainly the benefit has flowed both ways since the Franco -Japanese deal was done in 1999. First, Renault rescued Nissan, buying a stake (now 44%) and installing its Mr Ghosn as chief operating officer (and later chief executive). Mr Ghosn turned huge losses into a $7 billion profit...
Words: 3968 - Pages: 16
...business functions, how departments relate to one another and the process of decision making in an organization. Brief History of Nissan Motor Company Nissan is a Japanese multinational automaker located in Nishi-ku, Yokohama in Japan. ,they were not always known as Nissan. They actually started out as Kwaishinsha Motor car works in 1911 then changed its name to Kwaishinsha Motorcar co. around 1918. It did not actually start using the name Nissan until the 1930′s. The 1930′s were a big decade for Nissan; they grew to hold 74 firms producing auto parts and cars and in 1934, Nissan Motor was founded. Additionally, this was around the same time as WWII, and I am sure you can remember what part Japan played in WWII. Nissan built airplanes, trucks and engines for the...
Words: 3325 - Pages: 14
...AUTOMOTIVE INDUSTRY ANALYSIS Submitted by Team A Donald Bradley Morgan Bruns Adam Fleming Jay Ling Lauren Margolin Felipe Roman Presented to: Prof. Alan Flury December 5, 2005 ME 6753: Principles of Management for Engineers Executive Summary Chosen industry: This analysis focuses on the automotive industry, specifically, large-scale manufacturers of automobiles. The automotive industry is inherently interesting: it is massive, it is competitive, and it is expected to undergo major restructuring in the near future due to globalization and decreasing oil reserves. The analysis team members (we) feel qualified to perform this investigation due to our familiarity with the industry and our education—several of us have studied and worked on problems associated with automobile manufacturing and we are all mechanical engineering graduate students. Analysis Methodology: The report begins with a historical overview of the automotive industry. This is followed by an analysis of the industry’s structural characteristics using Porter’s 5 Forces Model as a framework, which provides an understanding of the automotive industry as a whole in its current state. Next, ten representative companies of varying sizes are analyzed and compared; the chosen companies and selection criteria follow. General Motors, Ford, and Toyota were chosen because they are the current market leaders. DaimlerChrysler, Nissan, Volkswagen, and Honda were chosen because of their status as stable international...
Words: 13102 - Pages: 53