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CEO Ghosn on FY11 Earnings and Record Growth

Nissan CEO Carlos Ghosn discusses his take on the company’s strong fiscal year 2011 financial results with Dan Sloan in the Global Media Center studio.

Q1. Nissan has just released last year’s financial results. Looking at the numbers and what stood out for you, how significant was this result considering some of the headwinds that Nissan faced?

CEO Carlos Ghosn

These results are very significant because we have established a record level of sales and a record level of growth. We have increased sales by more than 650,000 cars in a year that has been really crippled by at least one major disaster and another significant one –the one that hit Japan and that with Thailand. So, I think the growth – the global market share increase – was the most significant result.

This being said, I don’t want to underestimate the financial result that came with it, even though we have done better in the past. But taking into consideration the circumstances, the financial results were good – particularly the free cash flow, which was significant and allows us to have a very clean balance sheet by the end of the year 2011.

Q2. Nissan is among the last of Japan’s corporates to announce last year’s numbers. Looking at some of our industry peers here in Japan or the Japanese manufacturing sector in general, how do we compare?


Nissan stood out as a company that reacted very quickly in front of the headwinds no matter what was the nature of the headwinds.

This being said, we also need to position ourselves versus the rest of the industry globally. And, here, I would say that our results are good, because some car companies have done much better than us. Obviously, they didn’t have to suffer all of the headwinds that we have, because the earthquake of Japan hit practically uniquely the Japanese car manufacturers; the strength of the yen affected particularly the Japanese car manufacturers. And without these headwinds we should have done much better. Other car manufacturers not subjected to these headwinds have done much better.

Q3. Finally, sir, it’s very difficult to forecast just a month into the new business year, but looking at what your expectations are for fiscal year 2012 and how this will feed into Nissan’s Power 88 plan, where do you see this year’s results taking us?


In Power 88, we have two objectives, particularly two goals: 8 percent global market share and 8 percent operating margin. In 2011, even though we had strong headwinds, we ended up with a little bit more than 6.4 percent global market share, and we ended with 5.8 percent operating margin.

I hope that in 2012 we’re going to be advancing toward these two goals. Our budget quotes for operating margin, which is between 6 and 7 percent, would be a very good step toward the 8 percent hopefully before 2016.

And then we should be able to approach 7 percent global market share, which would also be a good milestone before reaching the 8 percent. And, frankly, we have everything – we have a lot of cars coming to the market, we have a lot of launches, we have a lot of technology. I think the company is really very well positioned in all the geographic areas. So, I’m looking at 2012 as a year when we will establish a new milestone toward these two important objectives.

And I’m optimistic that with what we have shown in 2011, plus everything that we have been investing in for the last years, should be there.


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