January 23, 2017 2:30 am JST
My Personal History

Carlos Ghosn (22) More than numbers

With Nissan Power 88, Ghosn focused on long-term efforts to build brand value

Carlos Ghosn announces Nissan Power 88, the medium-term business plan that will wrap up this year.

At the end of the fiscal year in March, Nissan Motor will close the book on Nissan Power 88, our current medium-term business plan. The two eights in the title refer to our goal for operating margin and our target for global market share at the end of the plan (to be measured in fiscal 2017). 

It was in the second half of 2010 that we started brainstorming for Nissan Power 88. At the time, there was no medium-term plan in place at Nissan. I had regularly introduced company plans every three years since I came to Japan in 1999, but we intentionally suspended our fourth installment -- called GT 2012 -- because of the financial crisis of 2008. We replaced GT 2012 with a tentative rebuilding program called simply the Recovery Plan.

Then the earthquake occurred in March 2011, two months prior to our planned announcement of Nissan Power 88. This forced us to delay the announcement of the plan, but the rebuilding of our damaged factories and supply chains progressed rapidly thanks to the efforts of our employees and partner companies. We were able to introduce Nissan Power 88 in June of that year, with its content largely unchanged from before the earthquake.

Our goals were ambitious, as they should be, but I emphasized to our executive committee that "those numbers are simply the result." While the numbers themselves had meaning, the most important factor was sustainable growth of our brand power and sales.

The use of numbers makes plans, policies and milestones easy to understand. This is why Nissan's previous medium-term plans were largely defined by numerals, such as Nissan 180 and GT 2012. They are an effective communication tool that everyone in a culturally diverse organization like Nissan can understand and share.

That being said, I decided that Nissan had moved past the point of relying on just numbers to define its goals. Our cost management and profitability had been steadily rising to the best level in the automobile industry, so both an 8% operating margin and an 8% global market share were well within our ability to achieve. I felt that there were more important things we needed to do than just chase numbers. We had to strengthen our brand and improve sales power. So with Nissan Power 88, I tried to craft a plan that would progress at a steady pace over the course of six years.

It takes time to raise brand value, but it is critical. With good brand value, we can reduce incentives and discounts. It is about quality, customer satisfaction and innovation. Today, Nissan advertises at major airports around the world and serves as a primary sponsor of soccer championships and other sports events, among other efforts to raise brand awareness and value.

The results have been positive. In 2010, for example, Nissan did not even rank among the top 100 global companies by brand value, according to an annual survey we commission. Today -- six years later -- we have climbed to 46th.

The strength of Nissan's brand power is the most effective tool for securing our long-term success. If I can forge a company that sustains quality, customer satisfaction and innovation at a high level, then that company will have a long future ahead of it.

We are two months away from the end of fiscal 2016. By then, the company should be approaching an 8% operating margin though still short of an 8% global market share. But again, it is not about the individual numbers, but the sustainability of our progress. We have improved operational efficiency and increased our competitiveness. And we will turn to our next medium-term plan to further build on our progress and evolve our business for the next six years.

Carlos Ghosn is chairman and CEO of Nissan Motor Co., Ltd.

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