Nissan’s Global Ambitions

Few would argue that one of the most remarkable automotive rags to riches stories of the past decade has been Nissan’s recovery from near bankruptcy. Controlled by French automaker Renault since 1999, Nissan has just reported another stellar year in terms of sales and financial performance, with an 11.1 percent operating profit margin and sales of 3.06 million vehicles worldwide. Though astute financial policies have accounted for much of the Nissan rebound, the Japanese automaker’s sales success can be attributed in large part to another important factor: design.

At the helm of the company’s design team throughout Nissan’s revitalization has been Shiro Nakamura. With a willingness to challenge convention — particularly Japanese automakers’ preference for bland design — Nakamura has helped put Nissan back on the map. In the U.S. market, now the world’s biggest profit generator for Nissan, the company’s cars and trucks have gone from drab to daring in a few years. But as Nakamura and Nissan CEO Carlos Ghosn considered Nissan’s global strategy, they recognized that while the U.S. market had made excellent progress, the company’s European operations needed a major boost.

The answer has been to lift several pages from the U.S. playbook, notably an emphasis on innovative designs tailored to local tastes. The strategy also involves a growing focus on sport utilities, pick-ups and crossover vehicles as well as continuing reliance on European production facilities in Britain and Spain.

Part of the challenge for Nissan Europe is its relationship with French parent Renault SA, which owns 44 percent of the Japanese automaker. The two operations need to work as a team, yet avoid stepping on each other toes in the marketplace. Nissan’s European chief Patrick Pelata said that since the Renault takeover in 1999, the Japanese company profitability problems in Europe have been fixed and he expects growth in 2004 and beyond.

The signs are promising as last year Nissan saw European sales top 540,000 units, which was a 14 percent jump, the strongest of any major automaker on the continent.

Director David Godber (above) says that the London studio is a key part of Nissan’s turnaround plan in Europe. A two-door Micra convertible (below) will follow the Murano into Europe in Nissan’s future.

That sales boost was founded on popular models like the British-made Micra sub compact and the X-Trail sport utility sourced from Japan. Going forward, Nissan Europe will add six new models within two years, starting late this year with the Murano crossover, which has proven a hit in the U.S. since its launch in 2002.

Pelata hopes the Murano will enjoy a similar reception across the Atlantic, where the crossover market segment has grown from 40,000 units in 1996 to 180,000 in 2003. A new sport utility and pick-up truck, both built in Spain, will follow Murano, as will a two-door convertible version of the Micra.

Nissan’s efforts to differentiate its products from other Japanese automakers in Europe, as well as its Renault cousins, are underscored by a $10 million-plus investment in a new design center. The Rotunda studio, a 40,000 sq. ft building in the heart of London, joins six other Nissan design facilities worldwide -— two in the U.S., three in Japan and one in Taiwan. “This studio is a key part of Nissan’s turnaround strategy in Europe,” says Rotunda director, David Godber. As one of Europe’s most expensive and crowded cities, London was not picked by Nissan for practical reasons. “This is a very cosmopolitan city,” notes Godber, “which makes it easier to attract the best design talent. Also you see every type of car on the road here which is useful when we want to compare our new concepts.”

The first concept to emerge from the Rotunda, the Qashqai crossover, debuted at the recent Geneva auto show. Similar to the Actic concept revealed by Nissan at the Detroit show in January, the VW Golf-sized Qashqai is intended as a more compact, affordable version of the Murano, said Pelata. “The Qashqai has the urban off-road look,” added Godber. “We believe the market for this type of vehicle is big.

It has a dual personality; a mobile office during the week and leisure vehicle on the weekend.” Satoru Tai, chief designer at the Rotunda, says the center is part of an effort by Nakamura to keep up the company’s creative spirit. “We are also here to ensure our separate identity from Renault,” says Tai.

For Nakamura the ongoing challenge in Europe, as well as Japan and North America, is to maintain the design-led success of the brand. Speaking at the Geneva show, Nakamura says he directs his 800-strong design staff to “keep its challenging spirit and avoid typical faceless Japanese designs.”

Creating a worldwide Nissan brand image is problematic, says Nakamura, because the company’s products span such a large range, from the diminutive Micra to the full-size U.S. market Titan pick-up truck. “There is nothing common between the Micra and the Titan, so I am not looking for a family look. It is a question of balancing diversity and consistency. The consistency comes not from the shape of the grille, but from the form language and value and attitude of design.”

Nakamura acknowledges that the design and quality of Nissan vehicle interiors has lagged behind the standard of their exteriors. However, he says more resources have been switched to interior design, as evidenced by the revised 2005 Nissan Altima unveiled at the recent Chicago show.

But Nakamura says the biggest threat to Nissan’s success both in the U.S. and Europe is that the company loses its design inspiration. Designing the next generation of widely praised models such as the Nissan 350Z, Murano, Infiniti G35 and FX45 will “not be easy,” he admits.