Nissan Looks Ahead to More North American Production, New Product

Special Coverage

State of Industry: North America

With market share up 0.4% and sales volume 15.2% ahead of year-ago through October, Nissan finds itself in a rare position.

The earthquake that struck northeastern Japan in March and reverberated throughout the industry’s supply chain has fellow Japanese auto makers No.1 Toyota and No.2 Honda still struggling to get back on track.

But third-ranked Nissan has been able to brush itself off and get back to the business of building cars, a testament to emergency plans in place prior to the natural disaster, says Bill Krueger, vice chairman-Nissan Americas.

Krueger, a longtime manufacturing executive with prior stints at Toyota and General Motors, moved up the ladder at Nissan earlier this year to his current position overseeing the auto maker’s operations in 41 countries. In an interview conducted by email, Krueger talks about the state of the industry and Nissan’s business now and in 2012.

WardsAuto: Has the economic recovery taken hold, or do you fear the U.S. is headed for a double-dip recession?

Krueger: There are signs of continued strength in the automotive markets throughout the Americas, and we’re confident that we’re taking the right steps to take advantage of that and gain our share.

Nissan has seen steady growth in our U.S. sales throughout 2011, and we expect the fourth quarter to be the best quarter of the year. Next year, we expect our business to continue to get stronger, thanks to the launch of several all-new vehicles in many of the strongest volume segments.

WardsAuto: What do you expect to be the next game-changer in vehicle technology?

Krueger: With the coming CAFE increases for 2025, any technology that increases a vehicle’s fuel efficiency will be vital. So the continued rollout of zero-emission technology such as (in the all-electric) Leaf will help us grow our leadership position in electric cars.

Bill Krueger, vice chairman for Nissan Americas.

We can also use that expertise to develop hybrids, fuel-cell vehicles and other new technologies. All of these technologies will play a big role in meeting or exceeding these aggressive regulatory targets and meeting consumers’ expectations for vehicle efficiency.

WardsAuto: Other than the economy, what is the biggest single threat to your business? In other words, what keeps you awake at night?

Krueger: We have to stay vigilant on our plan to combat the impact that currency fluctuations have on our business, and manage accordingly.

Our Power 88 midterm business plan charts a course for us to grow our sales dramatically. We know that Nissan must stay aggressive in the face of stiff competition throughout the Americas, but we have a great opportunity to grow our business throughout the Americas region.

WardsAuto: How do you see the vehicle-segment mix changing in the U.S. in 2012? How will your business be impacted?

Krueger: The great news for Nissan is that we have a strong lineup of vehicles that covers almost every market segment. So, when fuel prices increase and customers move into more fuel-efficient vehicles, we have vehicles like the Versa (subcompact), Sentra, Altima and Rogue (small cross/utility vehicle) for them to consider, as well as the Leaf.

When gas prices drop, we see a boost for our Nissan truck lineup, such as the Frontier and Titan (pickups) and Pathfinder (SUV). Introducing all-new versions of our volume leaders over the next couple of years will only strengthen our position in many key segments.

WardsAuto: How was Nissan able to get its production back on track so quickly following the Sendai earthquake in March?

Krueger: Our recovery from the earthquake and tsunami is a true testament to one of Nissan’s biggest strengths. That is, our ability to collaborate globally and cross-functionally and to act quickly and decisively in a crisis.

We were fortunate to only have two plants sustain direct damage from the quake. All of our people – management, manufacturing, R&D, purchasing and others – implemented the crisis plan we had in place to identify threats to our supply chain and to take quick action to minimize disruptions to our production.

Nissan was able to get our plants back up and running within a month. In some cases, we worked with our suppliers to help them restart their production, re-sourced parts or prioritized the supplies we had on hand to our most crucial vehicle lines.

WardsAuto: The strong yen is giving a lot of Japan-based OEMs a headache. How has the yen affected the pricing of your vehicles in the U.S.? Are more Japan-to-North America production shifts inevitable?

Krueger: Even before the yen started on its recent charge, we began prioritizing production of vehicles in markets where we sell them. It’s a sound business move and isolates us from currency fluctuations.

We’ve already announced production of the Leaf at our Smyrna, TN, plant in 2012 and the Rogue at Smyrna in 2013.

As for pricing, currency fluctuations are just one factor, along with increasing raw-materials prices that are putting pressure on vehicle prices. We’re not immune to that.

However, we have a keen focus to maintain competitiveness in the segments where we play and to offer a great overall value proposition to our customers.

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