SPEECHES


117th Annual General Shareholders' Meeting
Business Report

June 22, 2016

CCO Hiroto Saikawa

FY2015 Summary
FY2015 was marked by solid improvement in Nissanís business performance. The company largely advanced in enhancing operational efficiency in pursuit of the higher operating margin that the Nissan Power 88 midterm plan calls for. Greater monozukuri efficiency, cost reduction efforts, and enhanced operational efficiency on the sales side were major contributors.

For FY2015, our consolidated net revenues rose by 814.3 billion yen to 12 trillion 190 billion yen. Operating profit stood at 793.3 billion yen, up 34.6%. This represents an operating profit margin of 6.5%.

Net income was 523.8 billion yen. Free cash flow was 481.2 billion yen for the automotive business. As a result, Nissan ended the period with a net cash position of 1 trillion 503 billion yen from its automotive operations, which was up from the end of FY2014.

Reflecting on our healthy performance, we forecast a dividend payment of 42 yen per share for FY2015. We are also increasing our total shareholder returns with the buy-back, announced in February, of 300 million shares or up to 400 billion yen throughout this year.

Products / Sales Performance by Region
Turning to sales performance, despite the challenges in some of the regions, strong results in North America and solid demand in Western Europe lifted our global sales volume 100,000 units above the prior-year level to 5.42 million units, setting a new record.

Looking across the main regions…

Japan
In Japan, total industry volumes as well as Nissan’s unit sales declined. The limited number of new product launches was one of the reasons behind the drop. The addition of a hybrid version of the successful X-Trail is well received in the market. We took various steps to set the stage for a comeback in FY2016 and beyond. These include strong brand campaigns such as the “Yacchae” Nissan brand campaign, renovation of dealer outlets, and personnel increases. We are fully prepared for the coming years.

China
Despite intensifying competition, Nissan continues to be the number-one Japanese automobile manufacturer in China.
FY2015 sales were driven by solid demand for the X-Trail and Sylphy. Our performance was also strengthened by the start of sales of the Murano and the launch of the all-new Lannia. Our China line-up was further enhanced by the launch of the Venucia T70, a new compact SUV.

Nissan enjoys a very strong partnership with Dongfeng Motor, and we are taking the right actions, including localization and building a more effective distribution network, in order to deal with tough competition.

North America
In North America, we saw record sales. Our performance in the U.S. was driven by high demand for the Murano, Altima, and Rogue. We also launched the eighth-generation version of the Nissan Maxima and the all-new Titan pick-up truck. Our market share grew to 8.6%, and we narrowed the gap with Honda to half a percentage point.

Nissan also outpaced the market in Canada. In Mexico, the company maintained its number-one position.

Europe
TIV in Europe excluding Russia picked up. We increased sales and became the number-one Asian brand among Japanese and South Korean automakers in the European Union.

The Russian market remains weak, 32% down year-on-year. Despite the sales decline, we maintained our market share.

Let me discuss two global initiatives and the progresses.

Infiniti
The Infiniti premium brand continues to grow. Overall, Infiniti sales increased by 15%, topping 200,000 units. The Q50, the QX60, and the new Q30, which is the first Infiniti vehicle manufactured in Europe, are well received and enjoy robust sales. In China, in particular, Infiniti is the fastest growing brand among all the premium brands.

Zero Emission
Turning to our zero emission vehicles.... The Nissan LEAF is enhanced by a new 30 kilowatt / hour battery that extends its driving range by more than 20%. Since the model was launched in the end of December in Japan, sales between January and March rose by 80% against the comparable prior year period. Nissan remains committed to developing zero-emission mobility further.

Key Achievements During FY2015
These were the highlights of our sales and financial results for FY2015. Let me outline the main actions and key topics of the past year.

Quality / OaO Improvement
We are working to improve Overall Opinion – what we call “OaO” -- by building confidence in our company and products, and delivering better quality, which provides the foundation of OaO.

Various processes to enhance product quality are put in place between the development phase and preparation for the start of vehicle production. The successful launches of the X-Trail, Rogue, and Qashqai resulted in higher OaO and more trust and continue to deliver strong sales worldwide.

Besides keeping the fundamentals of monozukuri right to prevent defects in the process of engineering and production, we are focused on delivering products and services that provide greater satisfaction for our customers.

Alliance / Partnership
I would now like to mention partnerships and cooperations.

With regards to the Alliance with Renault, there was a discussion about granting double-voting rights to long-term shareholders of Renault under the Florange Law. Renault, the French state, and Nissan held talks on potential growth of the governmentís influence in Renault as well as the entire Alliance including Nissan. We reached a positive conclusion which included limiting the increase of the influence and amending our Alliance Agreement with Renault to ensure Nissanís autonomy and independence.

The agreement further strengthened the foundation that Renault and Nissan have been building over the seventeen years for the benefit of future development.
The Alliance has been producing synergies that benefit both parties during the years.

A powerful Alliance is a source of strength for the two companies. We expect to generate greater synergies going forward. In 2015, Renault-Nissan synergies reached 4.1 billion euros. And we are targeting 5.5 billion euros by 2018.

We also work together with Mitsubishi Motors. The issue related to the fuel economy of DAYZ and DAYZ Roox led to the suspension of the sales from the beginning of the new fiscal year. We regret the inconvenience and concern that this issue caused to our customers and shareholders.

Tampering with the numbers and using a procedure that does not comply with Japanese law should never happen. It is imperative for Mitsubishi Motors to identify the cause and take steps to prevent recurrence.

For Nissan, customers come first. We are taking care of affected customers with speed while working with Mitsubishi Motors to resume the sales of DAYZ and DAYZ Roox. Nissan is also ready to help our partner to prevent recurrence upon request.

Looking ahead, we signed a Strategic Alliance Agreement with Mitsubishi Motors, which the CEO will discuss. Under the accord, if all goes as planned, Nissan will become the largest shareholder of Mitsubishi Motors. We will support Mitsubishi Motors in addressing the immediate challenges, and generate synergies based on a win-win relationship.

Conclusion
This ends my report on FY2015. As I mentioned, despite a challenging period in the global markets, Nissan advanced in terms of profitability and operational efficiency.

CEO Carlos Ghosn

Introduction/FY15 Summary
Your company is on the right path. We created significant forward momentum in 2015, as Nissan became more efficient, more innovative, and more responsive to our customers.

In addition to achieving record sales, we deepened and expanded our strategic partnerships to drive new efficiencies. We also maintained our focus on fiscal discipline. As a result, our balance sheet is strong. Our brands are improving. And our breakthrough technology development activities have reinforced our position as the global leader in the electric vehicle segment; they are also accelerating our efforts to deliver Intelligent Mobility vehicles, including more advanced EVs, as well as autonomous driving and connected cars.

Looking Forward – FY16 & Beyond
We know we can build on these achievements. We are committed to maintaining our position as the #1 Japanese car manufacturer in China, the #1 Asian automotive brand in Europe, and the #2 Japanese automaker in the U.S. We are also aiming for the #2 spot in Japan and want to narrow the gap with the leading competitor.

With 28 plants worldwide and a presence in 167 countries, Nissan has the capacity and global coverage we need to improve our industry standing during fiscal year 2016 and beyond. In addition to these resources, we also have the vision, determination, and employee talent necessary to deliver a new level of value to our shareholders and customers.

FY16 Global Outlook
I expect that 2016 will be another year of progress. Once again, Nissan is poised for record sales. Our performance will be accelerated by this year’s new product launches and our enhanced focus on improving the customer experience. Nissan – and the Alliance family – will also benefit from the steps we are taking to significantly expand our partnership with Mitsubishi Motors.

Regional Outlook
Let me outline what we expect to see – in terms of our sales and production opportunities and challenges – in some key regions and business units.

Japan
Here in Japan, we expect to face another year of challenging conditions.

During FY16, we will be refreshing some of our core models, notably with the launch of a new compact car featuring our latest electric vehicle powertrain.
This new electric vehicle will meet consumer demand for greater autonomy and fuel efficiency. It will utilize a new “e-Power” system that matches the agility, quietness, strong acceleration, and efficiency of the Nissan LEAF.

This fiscal year, we will also introduce our latest generation autonomous drive technology, known as “Pro Pilot.” This system will build on our existing forward emergency braking technologies – which will be standard on 80% of our core models in Japan by the end of FY16. The newest version of this technology will make driving even safer and more efficient…by offering automated single-lane controls. It will be launched first in Japan…and subsequently in the U.S., Europe, and China.

I’m pleased to announce that you, our shareholders, will be invited to have the “first look” at these new models at a special unveiling and test drive event later this year.

China
Turning to China, the world’s largest automotive market. Although we are pleased that Nissan is the leading Japanese brand in China and that Infiniti is China’s fast-growing premium brand, we know we can achieve more.

Our 2016 performance will be strengthened by launches of the new Sylphy, the new Maxima, and the new Tiida. With these competitive entries into the market, we are targeting 1.3 million units in sales for 2016 in China.

Toward the end of 2016, we will also launch the all-new Venucia T90, the eighth model under our joint-venture brand with Dongfeng. We plan to equip 80% of our future joint-venture models with i-safety features. These vehicles will include technologies such as Forward Emergency Braking, Blind Spot Warning, Lane Departure Warning, and Driver Attention Alert.

These efforts reflect Nissan’s commitment to delivering Intelligent Mobility in China, where such technologies are being developed in a collaboration with Tsinghua University.

North America/U.S.
In North America, we will build on the performance gains that we have made over the last two years.

In the U.S., where Nissan was the only major brand that gained market share in 2015, we now have two of the top-10 best-selling cars: the Altima and Sentra.
We’re also seeing strong demand for the Rogue.

In FY16, we expect to see the full benefit of recently-launched products such as the all-new Maxima, the all-new Titan full-size pick-up. And we will continue to expand in the premium segment with new additions to the Infiniti line-up.

Europe
In Europe, we expect to continue our growth trend despite ongoing challenges in Russia. Our strength in Europe continues to be our crossover vehicle line-up, which includes the Qashqai and the Juke. And this year, we will begin production of the new Micra/March model. It will be assembled for the first time at a Renault plant, in France.

In addition, the expansion of the Infiniti brand in Europe will continue and build on last year’s successful launch of the Q30, which is assembled in the UK.

Infiniti
Turning to Infiniti…

2016 will be an important year for our premium brand.

Infiniti’s manufacturing base now covers four countries …Japan, the U.S., China, and the UK…on three continents; and, this year, the Alliance and Daimler will open a joint production facility in Mexico where new Infiniti and Mercedes-Benz vehicles will be produced. With this level of capacity, Infiniti is poised to make significant performance gains. This will also be fueled by new additions to Infiniti’s global line-up.

Infiniti is in the midst of one of the most exciting product rollouts in its history.
By the middle of FY16, Infiniti’s global line-up will include four sedans and five crossovers and SUVs. Almost every vehicle is new or has had a significant upgrade in the last two years.

Infiniti’s FY16 vehicle launches include the all-new QX30 active crossover, which will launch this summer. This cutting-edge vehicle comes available with an intelligent all-wheel drive system and will help us to attract a new generation of premium buyers in Europe, North America, and China.

We also look forward to beginning sales of the all-new Q60 sports coupe this fall. This was one of the most talked-about cars unveiled at this year’s North American International Motor Show in Detroit. It will deliver 400 horsepower from a new 3-liter, twin-turbocharged V-6 engine.

With stronger products and enhanced production, we expect to see further growth for Infiniti during FY16.

Datsun
2016 will also be an expansion year for our Datsun brand. We are enhancing the product line-up with the introduction of the Datsun redi-GO, the first urban-cross aimed at the Indian market. It uses the latest CMF-A architecture from the Renault-Nissan Alliance and features an efficient new engine.

This is the third new Datsun launched in India, and the fifth model we’ve delivered since we reintroduced the iconic Datsun brand two years ago.
We have now passed cumulative sales of 150,000 units in our four Datsun markets of India, Russia, South Africa and Indonesia.

Sales Finance & Aftersales
To further enhance the customer experience, brand value, and revenue, we are also leveraging other key business units – including Sales Finance and Aftersales. For every car we sell, we are seeing the benefits of offering attractive services to our customers throughout the ownership experience…from leasing and maintenance to repairs, financing, and insurance offerings.

In most markets, Nissan is in the top-two position in Sales Finance, resulting in a 45% penetration ratio. And sales finance now represents 29% of our operating profit margin. To increase this positive impact, we are deepening collaboration between our sales finance function and our sales and marketing teams.

At the same time, we are increasing our focus on Aftersales…which represents close to 40% of our operating profit margin. During FY16, we want to grow its impact by 6%. To get there, we will be harnessing big-data analysis, personalizing accessories, and upgrading vehicles in areas such as connected car options.

FY16 Financial Forecast
In FY16, we expect to outperform the industry sales pace and continue to enhance both revenue and profitability.

Globally, we project our sales to rise by 3.3% to 5.6 million units.
We also expect to move closer to our goal of an 8% operating profit margin. From an operational perspective, we are on track to meet this objective. However, this year’s ultimate profitability results will be tempered by considerable headwinds…including negative currency fluctuations and volatility in multiple markets.

Based on this outlook, Nissan has filed the following full-year forecast with the Tokyo Stock Exchange, using a cautious foreign exchange rate assumption of 105 yen to the dollar. Our forecast is based on the equity accounting method for our joint venture in China.

We expect net revenues to be approximately 11.8 trillion yen for the 12 months ending March 31st, 2017. Operating profit is targeted to reach 710 billion yen – representing a margin of 6%. Net income is expected to increase to 525 billion yen.

FY16 Dividend/Shareholder Return Outlook
Nissan will maintain a progressive dividend policy, reflecting our profitability and solid free cash flow generation. This enables us to increase the full-year dividend by 14.3% to 48 yen per share. And we are maintaining our commitment to a minimum pay-out ratio of 30%.

FY16 Strategy
To meet our goals for FY16, we will continue to execute our comprehensive, global strategy. I’d like to specifically discuss three priority focus areas:

• #1: Delivering high-quality, innovative new products & breakthrough technologies;

• #2: Enhancing visibility of our products and brands to customers worldwide; and

• #3: Strengthening the Alliance and deepening synergies, which will improve Nissan’s competitiveness.

FY16 Products
During FY16, we will make important enhancements to our global product line-up.

Small Car Offerings: Kicks
In addition to the new Infiniti and Datsun models I mentioned, we will strengthen our small car offerings.

This has been an area of vulnerability. But we are taking steps to bring these vehicles on par with our larger vehicles, in terms of their competitiveness and profitability.
In this effort, we are fortunate to have the expertise of our Alliance partner, Renault – which profitably manages their entry-level segment offerings.

Our progress is evident when you look at the new Kicks. This versatile compact SUV will reinforce Nissan’s leadership position in the crossover segment. Kicks will be a global product. It will go on sale in Latin America this year, followed by other markets worldwide. It was jointly designed in Japan, the U.S., and Brazil. And a Kicks fleet will be showcased at this year’s summer Olympics in Rio de Janeiro.

Competitive B: Micra/March
Our small car offerings will be enhanced with the launch of the new Micra model, which is named March here in Japan. Although it will be produced at a Renault plant, it is pure Nissan and will boost our brand value. From the inside-out, we have significantly improved upon the previous generation model by making the changes and enhancements in line with our customers’ requests.

LCV/NV300
We will also launch a new Light Commercial Vehicle. We look forward to beginning sales of the new NV300 passenger van, which will fill the current space between the NV200 and NV400. We are producing the NV300 in collaboration with Renault; and it will demonstrate the value of Alliance production synergies.

NISSAN GT-R
With this year’s product offensive, we haven’t forgotten about performance enthusiasts. This summer, we look forward to delivering the new 2017 Nissan GT-R. With an exciting fresh look for both the exterior and interior, it will be the ultimate symbol of Nissan’s passion and performance expertise.

New Technologies
Our forthcoming products will feature new technologies aimed at providing a safer, more efficient, and more connected driving experience.

This is our “Intelligent Mobility” vision, which will streamline Nissan’s efforts to deliver Electric Vehicles, Autonomous Drive, and Connected Vehicles…as well as other cutting-edge products. It will also enable Nissan to remain at the forefront of the technological transformation that the automotive industry is experiencing.
We created the zero-emission segment more than five years ago with the launch of the all-electric Nissan LEAF. We’ve now sold more than 200,000 LEAFs worldwide. And, as Saikawa-san noted, we have made significant enhancements to 2016 model LEAF.

By providing greater range and increasing the number of fast-charging locations, we will enable more zero-emission journeys. Nissan will keep working with government and private sector partners around the world to create highly developed charging infrastructures, just as we’ve successfully done here in Japan.

In addition to delivering more EVs, by the end of the decade, Nissan plans to offer more connected cars. By 2020, the Renault-Nissan Alliance plans to launch more than 10 models with autonomous drive technologies.

Increased Visibility of Products/Brands
Not only do we want our customers to have the best possible driving experience, we also want them to have greater awareness about our products and brands.

Today, Nissan is one of the world’s most valuable brands, ranking among the top 50 global brands according to the Interbrand’s annual ranking. To improve further, we are making the dealership experience more engaging and rewarding. And we’re working with our dealers to improve the design, functionality, and look of our retail outlets.

We’re also executing innovative marketing campaigns…particularly in the performance segment where the appeal of our NISMO-badged vehicles and the new GT-R are generating enthusiasm worldwide.

Nissan’s brand visibility will rise further with our sponsorship role at the 2016 Olympics and Paralympic summer games, which will be watched by an estimated audience of 5 billion around the world.

This will build on other sponsorship activities, including sports partnerships with the European Champions League, the Africa Cup of Nations, the International Cricket Council, and our “hometown” soccer team -- the Yokohama F- Marinos.

Strengthening/Expanding the Alliance
Another area of strength is Nissan’s ability to work with partners across our industry to deliver Alliance-driven synergies. This is not only lowering costs, it is enhancing our manufacturing capabilities, accelerating powertrain and technology development efforts, and enabling our company to stay ahead of fierce competitors and become one of the auto industry titans.

The cornerstone of our Alliance strategy is our 17-year partnership with Renault. With Renault-Nissan synergies topping 4 billion euros in 2015, the benefits of our partnership are obvious. And these synergies will continue to increase as we deepen our convergence initiative in four key functions: purchasing, manufacturing and logistics, engineering, and human resources.

Through the Alliance, we are also building engines and sharing vehicle architectures with our partners at Daimler. And we have a strong presence in the Russian market through AvtoVaz, which will allow us to benefit when that market recovers.

Today, the Renault-Nissan Alliance represents one in 10 cars globally and is the world’s fourth-largest automotive group in the world. Last month, we took an important step to further strengthen the Alliance by significantly expanding our strategic partnership with Mitsubishi Motors.

As part of our proposed agreement, Nissan would acquire a 34% stake in Mitsubishi Motors and become their largest shareholder.

Pending regulatory approval, this will lift global unit sales from the Alliance to more than 9.5 million units a year.

This transaction represents a potential win-win for both of our companies and promises to deliver significant synergies. We believe we can realize billions of dollars in one-time and continuing synergies by working closely together in areas including purchasing, common platforms, the shared development of new technologies, joint plant utilization and growth markets.

We envision a dynamic cooperation between two major, independent Japanese car manufacturers. Like Nissan, Mitsubishi is financially healthy. And we will leverage its strengths in the pick-up, SUV and plug-in hybrid segments.. Nissan has the opportunity – as well as the management and corporate governance expertise – to help Mitsubishi address its current challenges. We also have the commitment to transparency and integrity necessary to help Mitsubishi restore consumer trust in its fuel economy performance.

Earning and maintaining consumer trust is central to everything we do at Nissan and the Alliance. And we are confident that our company, and every Alliance partner, will benefit from Mitsubishi’s enlarged role in the Alliance family.

Philanthropy/Corporate Social Responsibility
Our work to enhance Nissan’s financial health not only allows us to be a leader in vehicle and technology development. It also fuels our efforts to establish Nissan as one of the world’s most sustainable companies and an example of good corporate citizenship.

To streamline and accelerate this work, we have added an important new position to our leadership framework: a Chief Sustainability Officer. Kawaguchi-san has been appointed to this position.

Although the scope of our Corporate Social Responsibility work is broad, our goal is simple. In every region where Nissan does business, we want to make a positive contribution. Our philanthropy efforts are focused on environmental, educational, and humanitarian activities. And they are making a difference worldwide…with some of our most high-impact programs are benefiting families and communities here in Japan.

Recovery/Relief Efforts - Japan
For example, since 2011, Nissan has provided recovery and relief support to those affected by the Great East Japan earthquake.

Over the last 5 years, we have donated supplies and vehicles in one of the most negatively impacted regions. Nissan employee volunteer teams have also helped to repair damaged houses. In addition, through the Nissan President Fund, we have maintained our support for field and play programs to assist children in recovery.

As you entered the auditorium, you may have noticed a display showcasing these efforts.
We have also provided relief support to help those affected by the recent earthquakes in Kumamoto and by last year’s heavy rains and flooding in the Northern Kanto region. And these efforts go far beyond Japan.

Recovery/Relief Efforts - Other Regions
In other regions, we have provided recovery support to assist those impacted by earthquakes in Ecuador and Nepal, and by heavy rains and flooding in the U.S.

For more information on our broad range of sustainability efforts, you can view our full Sustainability Report for 2016, which will be published on June 30th on Nissan’s website.

Conclusion
Before we open the meeting to your questions, I would like to reiterate my confidence in where Nissan is heading.
Our business strategy is clear and effective. We have started this fiscal year in a position of strength, and we are poised to deliver further value to our shareholders.

You can count on our leadership and employee teams to stay focused on achieving long-term, sustainable growth; attracting and retaining customers; closing the profitability gap with our competitors; and paving the way toward a new era of safer, more efficient, more connected, and more autonomous mobility.

Thank you all for your support of Nissan Motor Corporation. That concludes our business report on 2015 and outlook for 2016.

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