June 23, 2015

116th Annual General Shareholders' Meeting
Business Report

CCO Hiroto Saikawa

In fiscal year 2014, Nissan emerged as a stronger company with solid results. During my review of the past year, you will see that our results reflect both the progress that we have made to improve our operations and the challenging business environment that exists in some markets, such as the emerging markets.

As for our global unit sales, we faced a tough situation in some regions, including Japan; but with the contribution from North America from its strong sales, and Europe, where demand has started to recover, we had record-high global sales, rising from 5.19 million units in the previous fiscal year to 5.32 million units.

Our company has thus achieved a sales increase in line with the growth of the world’s auto market; and our global market share was 6.2%, on par with the previous year.

For the full 2014 fiscal year, our consolidated net sales reached 11.38 trillion yen, while our consolidated operating profit grew by 18.3% and reached 589.6 billion yen representing a 5.2% margin on net revenues.

Our net income grew by 17.6% from the previous year to 457.6 billion yen.
The free cash flow of our automobile business stood at 365.8 billion yen, and at the end of FY2014, the net cash of our automobile business amounted to 1.39 trillion yen.

Product Introductions

Turning to products, in FY2014 our company introduced innovative and exciting products in various markets worldwide. In total, we introduced and began selling 10 different new models across all of our brands.

Under the Nissan brand, we launched the Pulsar, NP300 Navara, Murano, and e-NV200.

The Murano was chosen as the best SUV with two rows for families in the United States.

Furthermore, the e-NV200 has been highly praised as a vehicle that greatly contributes to environmental friendliness.

Under the Infiniti brand, we introduced the long-wheelbase Q50.

Under the Datsun brand, we launched three models: the GO+, On DO, and Mi DO.

Under the Venucia brand in China, we added the e30 EV, as well as the R30 to our lineup.

Sales Performance by Regions

Next I would like to explain our sales results in major markets.

Japan:

Total demand in Japan fell 6.9% from the previous year to 5.3 million units.

Our overall sales dropped 13.3% from the previous year to 623,000 units and our market share stood at 11.8%, thus marking some unfavourable results.

We had products that recorded robust sales, such as the X-Trail and Dayz Roox, but there were intensified competition of the segments where our core models such as NOTE and Serena belong to. We also struggled due to the lack of distinctive image that differentiates our products from others in the competitive market.

China:

In China where our sales performance is measured on a calendar-year basis, TIV was up 7.6% to 22.34 million units.

Our 2014 sales amounted to 1.22 million units—which was on par with our result for the previous year—and our market share stood at 5.5%. Our company continues to be the number one Japanese automobile manufacturer in China.

In 2014, sales have fallen across the board for light commercial vehicle manufacturers where we were originally strong, as the result of new exhaust emissions regulations. Nevertheless, models such as the Sylphy series and the “Car of the Year 2014” award winning X-Trail, gained positive results. The competition is intensifying in China, and 2014 was a year that we strongly acknowledged that we need to further strengthen our competitiveness in this market.

North America:

In the key market of North America, we saw record sales.

Total demand in the United States increased 6.9% from the previous year to 16.73 million units. Our company’s sales grew by 8.9% to 1.4 million units, and our market share increased to 8.4%. Our flagship models the Altima, Rogue, and Sentra supported these robust results

In Canada, our sales surpassed the growth of the market, increasing by 22.4% from the previous year to 118,000 units. Our market share reached 6.3%.

In Mexico, we maintained our position as the top brand. Our unit sales increased by 16.9% from the previous year to 310,000 units; and our market share reached 26.1%.

I believe that the activities to increase our sales power ahead of other markets is paying off.

Europe:

Total demand in Europe increased by 1.7% compared to the previous year.

Our company’s sales grew by 11.7% from the previous year to 755,000 units, and our market share rose to a record high of 4.3%. These results were driven by products such as the Qashqai and Juke, which are the leaders in the crossover segment.

In Russia, total demand fell by roughly 18%, but in spite of this, our company’s sales increased by about 5% from the previous year to 173,000 units. Our market share there rose to 7.6%.

Other markets:

Sales in the Middle East increased 4.7% from the previous year to 237,000 units.
Sales in the Asia and Oceania amounted to 363,000 units, which were on par with the previous year’s level. And sales in Latin America fell by 1.2% from the previous year to 184,000 units.

Key Achievements During FY14

In addition to sales and financial highlights, let me present the two key initiatives we focused on in FY14.

Quality / OaO:

Starting with Product Quality. Quality is an extremely important element that directly supports customer’s opinion and trust in our company and products.

Once a problem with quality occurs, it takes a long time to recover. Meanwhile, taking all possible measures to ensure quality at the time of product launch will lead to strong sales of new models, but also throughout the lifetime of the model. This serves as a basis for building a strong brand.

As a result of implementing various quality measures in the process between engineering and the start of production, significant improvements are evident in he new product launches in the US. We intend to build on the success and continue enhancing quality.

At the same time, we have also taken steps to improve our customer satisfaction. For example, here in Japan, Nissan started a project called "Ladies First" to strengthen the customer service provided to female customers. As part of this effort, we increased the number of the female car life advisors at our dealerships, and created more female-friendly environments at dealerships across Japan.

CMF:

We have also advanced our development and manufacturing efforts through the "Common Module Family (CMF) platform.

CMF consists of five big modules which can be shared across different models. The five modules are: engine bay, front underbody, rear underbody, cockpit including speedometer, air-conditioner, and seats, and electrical / electronic architecture. We are creating diverse and attractive products by combining these compatible modules of common parts with styling and interior specific to each car.

Common modules also enable us to promote communization with Renault and ensure quality excellence while enhancing productivity by capitalizing on economies of scale that result in better cost competitiveness.

The X-Trail and Rogue in North America, and the Qashqai in Europe were all delivered through the CMF strategy; these products have received numerous awards. Their sales remain strong and support our profitability.

Going forward, our company will continue to expand CMF to a variety of models as the core of our development and manufacturing efforts.

Conclusion

In conclusion, during FY2014, in spite of the tough environment in multiple markets, our company delivered solid results.

FY2014 was a year of progress toward the goal of Nissan Power 88. It was a year when we were able to strengthen our foundation and move forward toward long-term, sustainable growth.

CEO Carlos Ghosn

Introduction/Summary of FY14 Achievements

Thank you, Saikawa-san. Since we gathered here one year ago, Nissan Motor Corporation has become a stronger, more efficient, and better-performing company. Fiscal year 2014 was marked by many operational improvements and by significant growth in key markets.

We enhanced our product line-up…and delivered several award-winning products, like the X-Trail…which was named “Car of the Year” in China.

We reduced our per-vehicle total delivered costs. We improved monozukuri competitiveness, expanded Nissan’s global manufacturing footprint and took steps to start increasing production in Japan. And we continued to lead the way into untapped markets…for instance, we became the first major auto brand to localize production in Nigeria.

Nissan delivered solid financial results. We earned higher revenues for the year, despite a challenging environment in several emerging markets. Thanks to our sustained fiscal discipline, our automotive net cash level has never been higher.

Last year, we increased global volume and set a new sales record. This was driven by our strong performance in the United States, Mexico and Canada. In North America, we saw record sales, with double digit gains.

Nissan also earned its highest-ever ranking on Interbrand’s survey of top global brands…rising 9 places to 56th. We maintained our position as the auto industry’s undisputed leader for zero-emission mobility.

We grew our network of partners across and beyond the auto industry… expanding our strategic cooperation with Daimler into the pick-up segment and teaming up with NASA to advance our Autonomous Drive vehicle technology. And we deepened Nissan’s longest-standing and most important partnership, the Renault-Nissan Alliance.

Looking Forward – FY15 & Beyond

We have entered fiscal year 2015 with powerful momentum that we will carry forward. Today, I want to discuss some of our goals for Nissan in FY15 and beyond.

Key Strategic Goals/NP88

The full scope of our global operations will continue to be guided by our strategic, mid-term plan, “Nissan Power 88.” This comprehensive strategy outlines how we plan to achieve a sustainable 8% operating profit margin by the end of fiscal year 2016, and earn a global market share of 8%.

FY15 Outlook

In FY15, we expect to outperform the industry sales pace and deliver record-high revenue and solid profitability.

Global Outlook

Globally, we anticipate that total industry sales volumes will increase 0.1% to 85.4 million units. With a number of new models launching from Nissan and Infiniti, we project our sales to rise by 4.4% to 5.55 million units…for a new sales record. Based on these projections, Nissan would capture a global market share of 6.5%.

Regional Outlook

Let me outline our sales and production opportunities and challenges in the key regions.

Japan:

Here in Japan, most recent projections point to a slight economic contraction in the auto market…indicating that we will have another tough year. Nissan projects that passenger and mini-car sales will drop another 3% in 2015, and Nissan will be off by 3.7%. At the same time, the current yen rate has provided Nissan with the incentive to restore production in Japan for additional export opportunities.

In 2013, we launched the successful X-Trail. In 2015, we added the X-Trail hybrid. It represents the best value in the middle-class SUV with a hybrid powertrain…at a price of 3 million yen. And the X-Trail hybrid is equipped with our emergency brake system as standard equipment.

The emergency brake feature is one of the most innovative safety technologies available on any car today.
This technology constantly looks for obstacles in front of the vehicle…even when the driver is not. This system is a building block for our future autonomous drive system…and it’s a true "Waku-tech."

Several years ago, Nissan set a target of reducing the number of fatalities and serious injuries involving Nissan vehicles to half of the 1995 level by 2015. In Japan, we met that goal six years ago. Today Nissan is engaged in activities aimed at halving this number once again by 2020.

That is why our emergency-brake technology will be standard equipment on more than 70% of the Nissan vehicles sold in Japan during 2015, and on 80% sold by the end of fiscal year 2016.

On the production side of the business, many of you may have read that we are studying opportunities to bring additional volume to a plant in Japan to support our global growth objectives. Our study includes producing Rogue models in Japan for export to the U.S. beginning next Spring.

Throughout the year, we will be preparing several plants here in Japan for the production of new models that we will launch in fiscal year 2016.

We are preparing for the arrival of these new models by refreshing many of our showrooms. During 2015, many of our Japan dealerships will be upgraded to reflect our brand standards. And we are continuing the rollout of our Ladies First program to ensure that women feel welcome and well-served in Nissan dealerships.

China:

Turning to China…This market is no longer an emerging market. China has emerged. It’s now the world’s largest automotive market and it will get bigger this year.

In 2015, vehicle sales in China are expected to grow by 5%. Nissan forecasts that our sales will outpace the market and increase by 6.4%.

Our performance will be strengthened by the Venucia T70, which began sales in January; and by the upcoming launch of the all-new Lannia sedan, the start of sales of the Murano, and the introduction of a new sports utility vehicle later this year.

North America:

In North America, the industry growth this market has enjoyed in recent years will likely end in 2015. Despite this trend, we are projecting a 5% increase in our sales in North America and 6.4% in the United States.

We expect strong sales of our core models: particularly Sentra and Rogue. Meanwhile, we will have a full year of Murano availability. Earlier this month, we launched the all-new Maxima. And we will add the next-generation Titan pick-up truck by the end of the year.

With this product line up, Nissan will set a new sales record of more than 1.4 million vehicles sold in the U.S.

Europe:

Europe presents a mixed outlook for both the industry and Nissan. Auto sales in Europe, including Russia, are expected to fall by 4.1%. This is primarily due to the unusual economic circumstances in Russia. However, Nissan expects to grow sales 4.6% in Europe, despite challenges in Russia.

Our strength in the European market continues to be our crossover vehicle line up, which includes the Qashqai and the Juke. This year, we will add sales of the NP300 pick-up truck and two all-new Infiniti vehicles.

Infiniti

2015 is an important year for Infiniti. We will launch two models: the Q30 and the QX30 compact crossover. These vehicles will be built in the UK as the first Infiniti vehicles ever built in Europe.

This step will expand Infiniti’s manufacturing base to cover four countries …Japan, the U.S., China, and the UK…on three continents. And it will help us to build on Infiniti’s performance gains during 2014.

Last year, we increased Infiniti sales by 12% to almost 190,000 vehicles.
In China, we increased Infiniti sales by 72% to more than 30,000 vehicles.
To sustain this momentum, we have established a joint venture with our partner DongFeng in China. As part of it, we have started local production of the long-wheelbase version of the popular Q50 sedan and the QX50.

With stronger products and enhanced production, we expect to see double digit growth for Infiniti globally during FY15.

Datsun

We also have high expectations for our Datsun brand. Since we started Datsun sales in 2014, we have launched the brand in India, Indonesia, Russia and South Africa and sold 78,000 cars.

Datsun is contributing to the company’s overall growth, accounting for up to half of cumulative sales in India and Indonesia and one-third of sales in Russia. During fiscal year 2015, Datsun plans to double its sales. We will also take steps toward expanding Datsun’s product line-up in India to three models.

FY15 Financial Forecast

Based on this outlook, Nissan has filed the following full-year forecast with the Tokyo Stock Exchange. Our forecast is based on the equity accounting method for our joint venture in China.

We expect net revenues to grow by 6.4% to 12.1 trillion yen for the 12 months ending March 31st, 2016.
Operating profit is targeted to reach 675 billion yen – representing a margin of 5.6%. Net income is expected to reach 485 billion yen, for an annual increase of 6%.

FY15 Dividend/Shareholder Return Outlook

Based on our performance outlook for fiscal year 2015 – and our expectations for continued profitability and solid free cash flow – we project an increase in the annual dividend by 27% to 42 yen per share.

FY15 Strategy

Clearly, we have high expectations for Nissan. To meet our goals, we will continue to execute our comprehensive, global strategy. I’d like to specifically discuss three key areas of action that we will focus on this year and throughout the rest of our mid-term business plan term:

• #1: Delivering innovative, high-quality new products & breakthrough technologies;
• #2: Making sure customers are aware of these efforts by enhancing visibility of our products and brands; and
• #3: Deepening Alliance synergies, which will improve our competitiveness.

FY15 Products & New Technologies

Our product offensive for fiscal year 2015 will include the launches of 6 all-new vehicles.

Infiniti Q30 & QX30:

I briefly mentioned the Infiniti Q30 and QX30, which will launch first in Europe. Both models have generated positive results in early testing. Against competitors, the Q30 was ranked first in overall design; and it tied with the Audi A3 on key metrics.

These competitive offerings will build on the momentum that Infiniti has achieved, particularly in China.

Venucia T70:

Our performance in China will be further boosted by the Venucia T70, a new compact SUV that was launched in January.

Lannia:

We will enhance our China line-up further with the introduction of the all-new Lannia.

We created this bold, sporty, mid-size sedan for young Chinese customers… a fast-growing demographic that now represents the majority of China’s consumers. Clinical trials show that Lannia is seen as "fashionable, novel, and dynamic" – the design elements we know our target customers prioritize.

Maxima:

In the U.S., we have delivered one of the most highly-anticipated vehicles in our 2015 line-up: the all-new Maxima. For more than 30 years, Maxima has fueled Nissan’s growth and popularity in the U.S. However, the eighth-generation model, which began sales three weeks ago, is completely redesigned and signals the return of the "Four-Door Sports Car."

This video gives you a look at our product offensive in the U.S. Take a look…

<VIDEO runs>

Titan:

Our U.S. line-up will be further enhanced this December, when we launch the all-new Titan pick-up truck. It was designed to fill a market gap between light and heavy-duty pick-ups in America’s largest vehicle segment. Since I unveiled the new Titan in Detroit at the beginning of this year, it is generating lots of interest…and it will make Nissan much more competitive in a segment that represents more than 2 million units in annual sales.

Additional U.S. models

To further improve Nissan’s position in the SUV segment, this year we are increasing supply of the top-selling Rogue and Murano.

This fiscal year we will also launch updated versions of our two top-performing cars in the U.S.: the Nissan Altima and the Nissan Sentra.

Technology

All forthcoming products will reflect Nissan’s commitment to delivering breakthroughs that advance vehicle safety, efficiency, and connectivity.

During our discussion later in this meeting, we will update you on Nissan’s plans to introduce an autonomous drive vehicle by 2020. We are continuing to develop this exciting technology.

The vehicle that stands to my left features the latest versions of hardware and software that Nissan is developing.

The vehicle that stands to my right is another advanced technology breakthrough. It explores how far we can extend electric vehicle range by making changes to the battery.

Today there are only two reliable ways to increase electric vehicle range.

• The first is to have a massive network of EV chargers, so that when you are away from home you have the ability to recharge easily.
• The other option is to put a larger battery pack into the vehicle so that the driver enjoys greater range. However, with today’s level of technology, adding more battery means adding more cost.

As you know, Nissan has been one of the world’s foremost advocates for the development of recharging networks. With our efforts and the support of government and private sector partners, Japan has one of the most highly developed charging infrastructures in the world.

There are now more than 14,000 EV chargers, not including home chargers, in Japan. This means that EV drives already have the freedom to drive throughout mainland Japan without worrying about battery range.

Unlike customers in some other markets, where the charging networks are in earlier stages, customers in Japan who want to enjoy the benefits of driving a LEAF have no need to wait. Japan’s vast EV charging network already provides an incentive for you to move to Nissan’s zero-emission technology. And, during FY2015, the number of chargers in Japan will increase even further.
However, that doesn’t mean we will become complacent and stop working to advance our battery and vehicle technologies.

We believe that, in the near future, Nissan can provide EV drivers with even greater “peace of mind” range, by offering comparative mobility to today’s conventional vehicles.

Nissan is exploring new materials and chemistry solutions in order to make thinner, lighter weight and less costly batteries. We foresee the day when you leave your home with a full charge, and are able to go about your day with no concerns…then return home with ample charge.

This video shows how we envision a routine day.

<VIDEO RUNS>

With this vision in mind, our advanced battery research will continue. But we will not wait for its completion to move forward. Later this year, you will hear more about our initial steps to increase EV range.

Increased Visibility of Products/Brands

Delivering innovative, exciting products and technologies will continue to be the core of Nissan’s business. To realize the full benefit of these activities, we also need to make sure that potential customers are familiar with our brands and aware of our vehicles and technologies.

That is why we are backing up our monozukuri activities with bold, targeted kotozukuri activities. One particular area of strength is our sports partnerships.

Here in Japan, our ongoing support of our "hometown" soccer team -- the Yokohama F- Marinos -- continues. To create further opportunities for Marinos’s presence in the J-League and for Nissan’s increased visibility, we established a new partnership last year with City Football Group…which is now a minority stakeholder in the Yokohama Marinos Company.

Our sports partnership with the UEFA Champions League is also increasing Nissan’s visibility and driving positive associations with our brand. The UEFA Champions League attracts more than a 110 million viewers every game. Although this partnership is just a year old, Nissan’s overall opinion scores have risen by 30 points among those who are aware of our involvement with UEFA.

Nissan continues to be a lead sponsor for the Africa Cup of Nations and for the 2016 Olympic Games in Rio de Janeiro. And we recently brought a commercial to America’s biggest advertising stage – the U.S. Super Bowl, with more than 114 million television viewers watching.

For Formula One Racing, the Infiniti brand continues to be one of the most visible brands on the grid – thanks to our ongoing partnership with Infiniti Red Bull Racing.

Renault-Nissan Alliance

Another area of strength is our focus on Alliance-driven synergies.
Since the Renault-Nissan Alliance was established almost 16 years ago, it has become the fourth-largest automotive group in the world. Last year, we sold 8.5 million vehicles – one in 10 cars globally. With a total of 8 brands, the Alliance represents 10% global market share.

When you look at our combined revenues of $150 billion, the Alliance ranks among the top 20 companies in the world. Globally, we employ 430,000 people. We have 106 manufacturing plants in 34 countries.

The success of the Alliance has attracted other partners, including: Daimler in Germany, DongFeng in China, Mitsubishi in Japan, and AVTOVAZ in Russia.

But we know we can grow further and achieve more.

To maximize Alliance synergies, last year, we converged four key business areas: Purchasing; Manufacturing and Logistics; Engineering; and Human Resources.
This has put us on track to over achieve our target of 4.3 billion euros in synergies by the end of fiscal year 2016.

During 2015, we will deepen collaboration between Nissan and Renault. However, everything that makes these two companies distinctive will remain separate.

Philanthropy/Corporate Social Responsibility

Our many efforts to make Nissan a better performing company have an additional benefit: they allow Nissan to be a good corporate citizen.

At Nissan, we want to make a positive contribution in every region where we do business. Our philanthropy efforts are truly global in scale, with some of our most high-impact programs improving lives and communities here in Japan.

Recovery/Relief Efforts - Japan

Since 2011, we have provided recovery and relief support to those impacted by the Great East Japan earthquake.

During 2014, we donated NV200s to 8 towns and villages in one of the most negatively impacted regions.

In addition, Nissan employee volunteers have continued working in the region to repair damaged houses. And, through the Nissan President Fund, we have maintained our support for field and play programs to assist children who have been affected.

Last year, we also provided relief support to help people and communities impacted by the landslide in Hiroshima.

Recovery/Relief Efforts - Other Regions

In other regions, we provided recovery support to assist those impacted by the earthquake in China, the Ebola outbreak in Africa, and the earthquake in Nepal.

Safety Efforts

In addition to these emergency relief efforts, Nissan has strengthened its commitment to improving road safety. Beyond developing and delivering cutting-edge technologies, we have continued our support for the "Hello Safety" campaign in Japan, which Nissan launched more than four decades ago.
To further improve road safety, we have launched Nissan Safety Driving Forums in China, India and Russia.

CSR Display/Sustainability Report

For more information on our safety efforts, I invite you to visit our display in the lobby.
To learn more about our broad range of sustainability efforts, you can review our full Sustainability Report for 2015, which was published yesterday on Nissan’s website.

Conclusion

In conclusion, Nissan has begun this new fiscal year in a position of strength. We are committed to achieving the goals of our mid-term business plan and keeping Nissan on a path toward long-term, sustainable growth.

We have the resources, the talent and the determination to meet our objectives. And we will continue to deliver for our customers and our shareholders.
Thank you, once again, for your support of Nissan Motor Corporation.

That concludes our business report on 2014 and outlook for 2015.

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