A SSIGNMENT 1

NISSAN IN INDIA

Introduction:

Company profile :NISSAN

Company Name NISSAN MOTOR CO., LTD.

President and Chief Carlos Ghosn

Executive Officer

Registered Head Office 2, Takara-cho, Kanagawa-ku, Yokohama-shi, Kanagawa

220-8623, Japan

Headquarters 1-1, Takashima 1-chome, Nishi-ku, Yokohama-shi,

Kanagawa 220-8686, Japan

Business Outline Manufacturing, sales and related business of automotive

products, industrial machinery and marine equipment.
Date of Establishment December 26, 1933
Paid-in Capital 605,813 million yen
Stock Information Number of authorized shares:6,000,000,000
Common stock (issued and outstanding):4,520,715,112
Number of shareholders:300,469(*As of September 30,
2009)
Number of Employees 30,718 (non-consolidated basis)
175,766 (consolidated basis)

NISSAN IN INDIA

Nissan Motors India Private Ltd (NMIPL) was incorporated in  2005 as a 100% subsidiary of
Nissan Motor Co., Japan.  with a vision of  ‘ Enriching  Customer’s Lives ’ through latest
Nissan Technology and products.

The Nissan Teana and Nissan Xtrail are the first products in the Indian market.The Xtrail
was introduced in 2005 and the Teana was introduced in 2007.

Nissan is building a manufacturing capacity of  2,00,000 cars at its facilities in Chennai and
is investing about Rs 4500 crores alongwith Renault in the Indian operations.
AUTOMOMOBILE SECTOR IN INDIA: In INDIA automobile industry is
Automobile industry in India is growing at rapid pace. There have been huge demand for cars in
INDIA over time but in the last few years due to improvement in economy of INDIA this
demand has increased tremendously. Total number of automobiles in use today in INDIA is 25
million. About two-third of the market demand is being met currently by local production and
import from other countries and one-third is left unmet. So there is a huge gap in market demand
and supply which is still there to be met. Major producers currently in the market are
Toyota,Suzuki, TATA, Honda, FORD, Hyundai

QUESTIONS AND ANSWERS:

Q1:List out the reasons why NISSAN is entering Indian market inspite many auto majors have
established their facility and marjed presence in India

Following are the points NISSAN wants to enter the Indian market:

 India has one of the largest economies in world and the second fastest in Asia and
sustained growth of 8-10%
 Wealthy middle class population provides largely untapped opportunity for growth in
automotive sector
 With youthful population of age group between 25-35 years there is potential to penetrate
untapped market
 75% sales of passenger cars sales in India are small cars
 Availibility of cheap skilled labour

Q2:Please list out the risks for such an investment priority wise

Ans :Following are the risks

 Lack of infrastructure:Poor quality of roads and ports may hamper India of becoming
export hub.So company may not be able to export its cars to other countries in time due
lack of facilities at the port
 Poor, heavily congested roads may reduce domestic sales
 Electrical shortages in India as well as high cost of electricity will hamper the production
  Poor quality and quantity of skilled labour may affect final quality of the product
 Labor regulations
 Government policies and programs may create a obstacle in setting up plant

Q3:What preventive/corrective actions should company take to avoid risks

Ans:Following are the p/c actions company should take to avoid risks

 Selection of location:Company should select such a location for setting up plant where
road connectivity is good and is of superior quality ,so transportation of raw materials
and manpower will be easy.
 Training:Problern of unskilled labour could be solved by providing them proper training
of the job.There will be initial investment for this ,but it will give benefit for longer
period of time
 Electricity:Select a location which has surplus of electricity and which provides
electricity at cheaper cost for e.g Gujrat
 Negotiations with the government regarding government policies should be done before
setting up the project in order to avoid further complications