Nissan's Turnaround Story

In Japan also, Nissan's market share declined from 34% in 1974 to below 19% in the late 1990s. In 1992 fiscal its pretax 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 launched another restructuring plan in 1995, when the manufacturing plant at Zama island was shut down, but the workers had to be transferred to other manufacturing plants due to strong resistance from the labor unions. The 1995 restructuring plan also failed to turn Nissan around. In FY 1998, another restructuring plan - Global Business Reform Plan - was announced. It aimed at consolidating operating profits of the company, concentrating on increasing profitability rather than sales. It planned to introduce high profit margin models, focusing on global markets especially the US market. But even before this plan could be implemented, Nissan had to borrow $708 million from state-owned Japan Development Bank to remain operational...