R E T U R N   T O   P R O F I T A B I L I T Y

Raising Cost Competitiveness
Through Efficient Production


INTERVIEW



Nissan's European manufacturing facilities achieve strong productivity and top quality through the use of advanced production technologies. Working in cooperation with our design centers in Europe, this production network raises our ability to produce cars that meet the needs of European drivers.


Lower development and manufacturing costs have contributed strongly to Nissan's price competitiveness. Steps to achieve productivity gains, improved capacity utilization and higher efficiency yielded concrete results during the past fiscal year.

We have continued lowering manufacturing costs and complexity by reducing variations of models and parts and raising the number of parts shared across model lines. Moreover, increased cooperation with suppliers in the areas of design, development and manufacturing has resulted in modifications that have lowered the cost of existing parts. Design-in programs and simultaneous engineering on a global level with Nissan Research & Development, Inc. and Nissan European Technology Centre Ltd. have also emerged as methods for speeding product develop-ment and lowering its cost, designing lower costs into new models, and making model introductions more timely.


Approximately two-thirds of all European sales are now sourced from European manufacturing plants, such as NMUK's Sunderland facility. These facilities support Nissan's cost competitiveness in the region, and have also become an efficient production base for exports.


Nissan's focus on investing in manufacturing efficiency and the profitable production of safer, more environmentally friendly cars rather than capacity expansion has boosted our ability to design and produce cars and commercial vehicles with improved marketability. Our pursuit of efficiency has not lessened our commitment to building quality, reliable automobiles, which received independent affirmation in the past fiscal year as the internationally respected market research firm J.D. Power & Associates awarded its 1995 Bronze Plant Quality Award to Nissan's Tochigi Plant. This award recognizes a plant's ability to produce cars that result in a very low level of customer complaints.



O Toyoguchi, plant manager of the Tochigi Plant (right), accepted the 1995 Bronze Plant Quality Award that market research firm J.D. Power & Associates awarded to the plant in recognition of its ability to produce cars that result in a low level of customer complaints.


Our goals for the fiscal year ending March 31, 1997 and beyond include expanding upon our ongoing program of making better use of our global automobile and component manufacturing capabilities and increasing purchases from cost-competitive overseas parts suppliers. Part of this effort will entail further progress in importing autos made by our plants overseas to Japan when Nissan can achieve a clear cost advantage. These moves complement efforts to enhance our product lineup, optimize efficiency and help insulate Nissan against external factors such as currency fluctuations. During the past two fiscal years, we achieved cumulative cost reductions of 280 billion yen in Japan, and we intend to continue enhancing productivity by 10 percent annually. We achieved this objective for the fourth consecutive year in the past fiscal year, in part by terminating vehicle manufacturing at the Zama Plant in March 1995 and moving production to other plants; this improved our domestic manufacturing structure, raising capacity utilization rates by approximately 10 percent.


"We aim to produce cars . . .
that raise customer satisfaction."


Shin Miyahara
General Manager, Manufacturing Department No. 1, Oppama Plant
We aim to produce cars that satisfy customers. Through TQM (total quality management), we can raise customer satisfaction in ways like minimizing the number of new cars coming back to dealerships for minor adjustments. This thinking is one reason the Oppama Plant won the Deming Prize in 1992. And if anyone knows how hard building a car is, it's the people on the factory floor, so we work closely with engineers to reduce variations of parts and increase parts sharing among models. This has been a big factor in our ability to manufacture high-quality cars even more efficiently.


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