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Nissan unveils 8% growth plan

2011-06-28 12:51

AMBITIOUS: Nissan would need to sell an extra three million cars per year by 2017 to reach its new goals.

YOKOHAMA, Japan - Nissan is targeting eight percent of the global auto market, the automaker's chief executive said while delivering a business plan.

Carlos Ghosn unveiled a six-year growth plan, called "Nissan Power 88", on Monday, June 27, 2011, targeting an eight percent global market share and operating profit margin by the business year ending in March 2017.

The margin target would place Nissan at the top level of profitability among mass-volume automakers and compares with the 6.1 percent it achieved in the business year that ended March, 2011.

YEN'S STRENGTH


Asked if the margin target was achievable during the first, three-year phase, Ghosn said: "I hope so, yes."

The yen's strength is among the biggest handicaps for Japanese automakers, reducing the value of earnings made overseas when converted back into yen.

In an interview with a small group of reporters, Ghosn said that while Nissan would never be immune to the yen's swings, the company was working to shrink the difference between yen-based costs and revenues, which he said amounted to about 1.5 trillion yen (R123.9 billion) last year.

"We are reducing this gap, to probably less than 1 trillion yen (by the end of the midterm plan)," Ghosn said, adding that would help shield Nissan against currency volatility.

PLANTS AND EXPANSION


The other pillar of Nissan's business plan is for an increase in global market share to eight percent by 2016/17 from a record 5.8 percent in 2010. Based on Ghosn's assumption that the global car market would top 90 million by then, the goal would represent additional sales of 3 million cars at Japan's number two automaker, to at least 7.2 million vehicles.

Much of that growth will be in emerging markets such as China and Brazil, where Nissan is planning new factories to fuel its expansion.

Nissan said on Monday it was planning a 200,000-vehicles-a-year factory in Brazil, and would announce China-specific expansion plans in July.

But outside those two countries, Nissan will instead expand capacity at existing factories, Ghosn said.
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