May 24, 2012
The View from Numero Uno
May 24 – Yokohama – José Luis Valls, president and director general of Nissan Mexicana, stopped by the Global Media Center this week, discussing how Nissan attained and plans to expand its market-leading position in Mexico.
Q1. What kind of models and strategies have taken Nissan to the Numero Uno spot in Mexico?
Nissan Mexicana, President, José Luis Valls:
Well, you’ve just mentioned numero uno and that means a lot for us in Mexico. I’m honored that I’ve been invited to share our business strategies and actions that have made that possible. I will summarize our strategy.
First of all, product portfolio. We have a very long history of successful products starting with Tsuru 30 years ago in Mexico, and they actually built the foundation for durability and reliability for Nissan, for a very rational purchase in a market that is very sensitive to price affordability. It has built a very strong reputation for the brand at the lower end, which in Mexico is a big portion of the market.
As to Power 88, it’s strong sales power. I’d say it’s the brand power. We have that anchor of durability and reliability that is in our DNA but we’re now evolving to become a “power brand,” which means not only increasing volume but mix and pricing to tap into opportunities the market is giving us, bringing the value of our brand to the upper end.
We’re moving in that direction with new products, exciting products, more aspirational—and that is coming into higher prices, while keeping the volumes up.
The third point is more in the dealer network. It’s a very strong dealer network, very capitalized, with very committed professionals and disciplined dealers making it possible to achieve big volumes. Our all-time record volumes with market share of 25.3% for the last fiscal year, and currently, from January to April, we’re at 26.1%–also a record.
The fourth point, I would say, is the financial arm. In a market like Mexico, where almost 70% of purchases are through financial products, a strong financial arm working along with us and our commercial strategy has been very important and crucial for our results.
And our customer focus—walking the talk on customer focus. We want to not only be No. 1 in sales but in customer satisfaction. CSI and SSI are crucial. We ask the dealers for excellence. We deliver excellence in quality, and we ask them to deliver excellence in service and they do. That’s been recognized, and we’re being honored with the preferences of Mexicans, giving us a quarter of a very competitive market like Mexico.
I would say these five pillars have been crucial. They take us to where we are now and, for sure, will be the platform to continue our growth in the future.
Q2. How will increased production ahead factor into performance?
We currently have a very important manufacturing footprint of the two plants of Cuernavaca and Aguascalientes. We delivered last year an actual production record of 643,000 units, but it’s still not enough because Mexico is not only supplying the domestic market with 30-32% of total production, but also North America—the U.S. and Canada—Brazil and the rest of Latin America, and supplying Europe and the Middle East. In total, it’s more than 100 countries.
So, it’s not like we’re relying on just one market, U.S. or domestic. We have built a hub for exports. That is a situation that comes because of the talent of the people, the quality of the products, and the management and also the logistics – the opportunity and the talent to send our products everywhere. There’s also the supplier base and the localization of suppliers, which makes a great formula to create in Mexico even more.
This has been taken into account by top management and we have decided another big investment for a third plant, a second plant in Aguascalientes, with a $2 billion investment that will take our capacity in Mexico over 1 million units. That’s important and will not only supply more in an increasing market in Mexico, but also in the rest of the world as I mentioned.
Q3. What are the main consumer trends in Mexico?
Mexico is a very sophisticated market in terms of brands. We have trade agreements with more than 45 countries and it makes us very, very competitive with more than 50 brands in the market, which is something interesting for the future.
If you see the growth in the middle class and the upper class, we have seen opportunities for luxury brands. We just launched Infiniti a few months ago with five dealers in key cities trying to target 75% of the market in this “Phase 1.” We’ll now be targeting “Phase 2”, the rest of the shopping areas.
We see an opportunity there. We see an opportunity as part of being a power brand, moving from rational to emotional, working more in the upper end and working not just in volume but in pricing and mix, and secondly in luxury. Our Infiniti brand will pull up our Nissan position.
Q4. How do you sustain the Numero Uno position?
First, we can’t be complacent in terms of not having anyone ahead of us. Everybody wants to catch us, so we need to do better, and certainly have many areas of opportunity. We try to dig down and do better in every aspect of the business.
We are good and very strong in total, but we can do better maybe in the upper end, have a higher value within our brand, do better in luxury, and do better in LCVs. We need to do better in customer satisfaction, we need to be No. 1 in the after-sales area. We’re putting many things together to challenge us all the time.
At the end of the day what I tell my team and dealers is our philosophy: We can have the best product portfolio, the best processes, the best technologies, but it’s the people that make the difference. We have great talent already, ready to deliver the extra inch to deliver outstanding results. It is the people in Mexico, for me, who are making the difference. We’ll keep investing in these people.