SWOT analysis of Nissan Motors will elaborate the strength & weakness of, opportunities & threats for Nissan Motors Ltd. It will provide a visual overview that will prompt discussion around the company’s strategy and situation.
Nissan Motors Ltd is a Japanese multinational automobile manufacturing company. The headquarter of Nissan Motors is in Nishi-ku, Yokohama, Japan. In 1911, Masujiro Hashimoto founded the Kwaishinsha Motor Car that gradually became the today’s Nissan Motors.
SWOT Analysis of Nissan Motors
Strength of Nissan Motors [Internal Strategic Analysis]
- Cost Controlling Capacity – The Nissan motors outsource some of its works, and because they reach the economies of scale in the production unit, the cost remains lower.
- Eco-technology – The Company has been manufacturing eco-friendly vehicles which are giving them extra advantages over other companies that do not manufacture those types of vehicles. They introduced a project called “zero emission”, and by 2010 they became the largest mass-production eco-vehicle company.
- Brand Image as a Sporty Car Maker – Nissan is Japan’s second-biggest automaker, and also its image is closer to sports cars, unlike other car companies. They have to successful sports car lines. Those are the Z and the GT-R.
- A Large Number of Employee recruited – Globally, Nissan Motors recruited over 1.5 million employees.
- Growth rate – In the year 2015, the sales increase in the US and Europe – outperformed the growth rate in total industry volumes.
- Reduced labor costs – it has factory setup in different places, according to the cost minimization principles.
- Skilled workforce – Nissan has a strong skilled workforce. It has 142,925 skilled employees worldwide. It has its own training facilities by which it trains its workforces.
- Decreasing Fuel Price – fuel price and sales are negatively related. It means if fuel price increases then the sale of the vehicle will decrease and vice-versa. Conversely, if the price falls then the sale will increase. Currently, the price of oil is falling that may result in increasing in sales.
- Production Capabilities – Nissan Motors has the capacity to produce more than 4 million units of car years. It has manufacturing locations in India, Brazil, Japan, Thailand, USA, Spain, and Malaysia.
- Supporting Green Environment – It is a pioneer in the electric car segment that supports the green environment.
Weakness of Nissan Motors [Internal Strategic Analysis]
- Lack of Luxuries – Although, they provide sport looking cars, they lack luxury.
- Product Recall – in the recent few years, almost two million cars of different models were recalled by Nissan Motors Company. Though the portion is low comparing with the total [34 million cars were recalled worldwide in the year 2015], still it does not add value to the business reputation.
Opportunities for Nissan Motors [External Strategic Analysis]
- Global Market Expansion – The global market is growing. The countries like India, China, and Bangladesh are becoming more vehicle dependent countries day by day. These markets are the potential place for Nissan.
- Competitive market – As it has been becoming larger in the production of eco-friendly cars, Nissan has the opportunity to beat the market.
- Cost structure – As it does achieve the economies of scale, it minimizes costs.
- Future profitability – The probability of future profitability is high as the market is expanding.
- Brand portfolio – Nissan sells its vehicles under the Nissan, Datsun, and Infiniti brand names.
Threats for Nissan Motors [External Strategic Analysis]
- Exchange Rate Fluctuation – As Nissan is a multinational company, it has big risk exposure to exchange rate.
- Government Regulations – Nissan is a multinational company. It has to conform to the law of different nations in the world. What one nation see good maybe be treated as bad by another nation. A certain change in the rule may bring constraints in the operation of Nissan’s operations.
- Decreasing Fuel Price – Decreasing fuel price may bring harm the sales of eco-friendly vehicles.
- Substitutes of Private Cars – the substitutes of personal cars such as buses metro trains are on increase. 20% drop in the sale only because of increasing competition in the passenger car segment.
Nissan Motors has more advantages than disadvantages in running its operations. The main factors affecting Nissan Motors are unstable oil price, growing competitors, changing government regulations of different countries, substitute vehicle like buses etc. If the company conforms to the external factors, it will be doing well in the future. Internally, the Nissan Motors is a strong company.
Recalling history of Nissan: http://www.edmunds.com/recalls/nissan.html