Nissan and Mitsubishi Turnaround

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  • Topic: Mitsubishi Motors, Nissan Motors, Carlos Ghosn
  • Pages : 23 (5966 words )
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  • Published : December 13, 2012
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Tale of Two Turnarounds

One Problem, Same Solution but Two Results

MBA General-2012/2014 Weekday batch

Semester I (first half) – December, 2012

Group Assignment

By

Group II –Team 05

Members:

Mr. S. Katpaganathan - 2012/MBA/WD /57

Ms. I. U.Ranabahu - 2012/MBA/WD /48

Mr. A. Devarajah - 2012/MBA/WD /63

Mr. C. Wijayasekara -2012/MBA/WD/70

Mr. S.Sivapalan - 2012/MBA/WD /61

Course: MBA 530 – Management Process and Practice

Postgraduate and Mid-Career Development Unit

Faculty of Management and Finance

University of Colombo

Acknowledgement

We would like to express our sincere gratitude towards our lecturers, Mr. C. Aluthgama and Brig Dr. H L David, who abundantly helped us and offered assistance, support and guidance, which helped us to obtain a great deal of knowledge in completing this assignment.

Table of Content

1. Introduction ……………………………………………………………………..03

1. Significance of the Study..........................................................................04

2. Research Problem……………………………………………………………..04

3. Research Objective……………………………………………………………05

2. Literature Review ……………………………………………………………….06

3. Research Findings

1. Causes of Troubled Times……………………………………………………08 2. Intentions for Investing………………………………………………………09 3. The revival schemes opted…………………………………………………...10 4. The Success and The Failure………………………………………………...14

4. Conclusion………………………………………………………………………..22

5. Bibliography .…………………………………………………………………….24

Section 1

Introduction

From late 80s to late ninety’s Japanese manufacturing sector faced turbulent times due to various reasons. The economy of East Asian countries was being affected heavily due to the fall of Thailand Bhat. The major sector inside the manufacturing sector that was affected was Auto Mobile. The auto giants such as Toyota, Mazda, Honda, Nissan, and Mitsubishi displayed fall in sales and net profit. Of all these organizations only Toyota managed to stay profit, when all other posted loss at least once. Amidst this turbulent times occurred a remarkable turnaround and a disappointing failure.

Nissan and Mitsubishi, who faced similar problems such as fall in sales, escalating production cost, mounting debts, disorganized supply mechanism and general fall in economy, chose to seek foreign investment. Nissan finally chose Renault as its capital investor and Mitsubishi chose DaimlerChrysler. At the beginning, weighing the partnership with its contributors’ past performance all believed Mitsubishi got the better deal.

On the contrary five years later Nissan became the most successful restructured organization as Mitsubishi plummeted further into losses and debts. Apart from this MMC’s top management lost its credibility and the brand its image.

The report analyses the following features of the entire events,

1. The situations that led Nissan and Mitsubishi into troubled times.

2. Intensions of Renault and DaimlerChrysler and their reasons to invest in Japan.

3. The revival schemes opted by the new managements of Nissan and MMC

4. The reason for the success of Nissan and failure of MMC

Nissan Motor Company Ltd is a Japanese multinational automaker headquartered in Japan. It was a core member of the Nissan Group, but has become more independent after its restructuring under Carlos Ghosn (CEO). Nissan was the sixth largest automaker in the world in 2010. It formerly marketed vehicles under the "Datsun" brand name. In 1999, Nissan entered a two way alliance with Renault S.A. of France, which owns 43.4% of Nissan while Nissan holds 15% of Renault shares, as of 2008. Along with its normal range of models, Nissan...
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