Budget Project Outline Environment the

Budget Project Outline Environment The automobile market is quite a fragmented market, with many carmakers from different industrialized countries competing on the market. If we consider some of the companies Nissan is battling with, among the most important are car producers from Germany (Daimler-Chrysler, BMW, Volkswagen), the United States (Ford, General Motors) and France (Renault, Peugeot, Citroen), but also brands from the new developing economies in South- East Asia, most notably South Korea (Daewoo and KIA), as well as the traditional companies from Japan (Mitsubishi and Toyota).

Because of this high number of participants in the market, research and development plays an important role in any company's presence on the market, as well as on the projects it may launch in the future. Indeed, the automobile industry is providing, at this point, numerous opportunities, both in terms of technical achievements, as well as in terms of design and comfort. Our competitors will most likely continue their R&D investments, keeping their brand specific as well.

We are expecting Daimler-Chrysler to continue producing elegant, high class vehicles, while Peugeot and Citroen will be contributing to the middle class segment. Nissan has a well determined response to the competitors' moves. In this sense, 2003 was a good example, during which 10 new models were launched on the market, with several new segments being penetrated at the same time.

The company's vision, "enriching people's lives," is a well-defined expression of what the company wants to do in the future: promote new, innovative products and services to the market and its customers. B. It is quite difficult to pinpoint the favorite models that the customers prefer. However, these generally range from the extremely successful Nissan Micra, renowned as one of the best cars in its class released in the last years, and the terrain vehicles, among these X-Trail, Terrano and Patrol. C.

As mentioned on the company's website, the economic factors will play an important role in the future evolution of Nissan's business. According to this, there are several variables of concern, most notably foreign exchange and interest rate. If we refer to foreign exchange, there are two different trends in the yen's relation with the two other main currencies in the world, the euro and the dollar.

The dollar has followed a serious decline in the last month, especially in November, reaching 15 years lows against the yen and being currently close to the 100 yens psychological level. The devaluated dollar influences the company's exports to the United States, as well as to the other countries paying in U.S. dollars. The macroeconomics behind this are quite simple: because the dollar is weak, the exports will cost cheaper and will bring lower profits to Nissan, where production (wages, fixed costs, materials) are paid for in national currency.

As for the euro, the trend has been slightly increasing lately, thus encouraging exports to Europe, which in time could become a more important market than the United States if the dollar devaluation continues. As for interest rates, again we have to turn to macroeconomic principles to explain the underlying mechanisms. In general, a higher interest rate does not encourage spending, which would mean a drop in demand.

In Japan, the interest rates have been at very low levels, however, in the United States, for example, the Federal Reserve has announced an increase to 2% of the interest rate, which may influence Nissan's exports in the U.S. further more. D. As for commercial and political issues, the U.S. And the European Union are recognized for practicing several trade barriers, especially in their key industries, with the obvious goal of protecting their national producers.

The American case in the 80s is well-known, when protectionist measures were adopted in order to stop the increasing exports of Japanese car brands to the U.S. This has partially continued during the 90s as well, so protectionist barriers is one of the things Nissan needs to consider when exporting to its main partners. There are two different actions Nissan may consider in the future in this sense.

The first one refers to the fact that Renault, an European company, still holds a significant part of Nissan shares, which may facilitate exports on the European market. On the other hand, trade barriers can generally be avoided by direct implementation in the respective country, a measure which Japanese companies, especially Toyota, have successfully applied in the U.S. during the 80s. 2. Internal competencies A. General Motor seems to be currently both the most important producer and the sales leader. However, this should come with several amendments.

If we are referring to the market leader, there are several criteria worth mentioning. First of all, the number of cars being sold, but also the overall income, totaling the volume of sales. Additionally, production figures are not necessarily relevant figures, because sometimes a company can produce and fail to sell. B. Nissan has successfully implemented quality norms over the years, both in terms of safety and technological activities and in terms of design.

There are several examples as for the company's concern for the customers' safety when driving a Nissan. The latest safety inventions, mentioned on the company's website, are the active headrest and the SRS Curtain Airbag System. The former provides security developments for the back of the head in case of an impact, while the latter brings additional components to the traditional airbag system.

As for technological achievements, the XTRONIC CVT-M6 seems the most notable, as "the world's first steel-belt." So, in this sense, Nissan has provided the customer both with technological improvements, but, as I have mentioned previously, with a wide variety of car models, from jeeps to small vehicles, suited for any segment of consumers. C. Nissan strongly benefits in this sense from its partnership/ownership with Renault, who ensures part of the parts.