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Nissan Accelerates Assault on U.S. Market

Autos: Japan's No. 3 car maker appears to have turned a corner as it readies new models and improves efficiency.


SMYRNA, Tenn. — Steve Fisher runs his fingers along the paint jobs of the Altima sedans and Xterra sport utility vehicles that hum past him on the assembly line at the Nissan Motor Co. factory here. He spends an average of 66 seconds on each vehicle as it passes by--up to 465 times a day--checking switches, panel fits and connections under the hood.

Occasionally a screw doesn't line up, a hose fastener is broken or there's a chip in the paint. But Fisher, who has worked here for 11 years, rarely finds defects--perhaps no surprise, because this plant has been ranked the most efficient car factory in the U.S. seven years in a row.

Exhaustive quality exercises, scores of robots and the industry's first fully automated paint shop are part of the arsenal behind the No. 3 Japanese auto maker's forthcoming assault on the U.S. market.

Nissan already has announced more upcoming new models than any other auto maker except global leader General Motors Corp.: the much-anticipated Z sports car; the Murano "crossover," a blend of car and sport utility vehicle; the Quest minivan replacement; a full-size pickup truck; and a full-size SUV.

On the luxury Infiniti side, Nissan has the G35 coupe and M45 sedan, the FX45 crossover and an upscale version of the full-size SUV.

That's nine new vehicles that will hit the U.S. market between now and mid-2004.

With its recent new models, the company has been "hitting home runs, with the products very well received," said Jeff Schuster, an auto industry analyst with J.D. Power & Associates in Detroit.

Analysts praise Nissan for its efficiency at Smyrna and around the world.

"When you hear platform sharing, 'lean' manufacturing and flexible tooling such as Nissan is doing ... it ensures things like quality," said Catherine Madden, an auto manufacturing specialist with forecaster DRI-WEFA.

But the news on the quality front is not all rosy for Nissan. In J.D. Power's annual Initial Quality Satisfaction survey--a ranking of problems reported during the first 90 days of ownership--released last month, Nissan fell from No. 3 to a tie for No. 6 as domestic auto makers gained ground.

"We've always focused on the long-term quality, durability and reliability," Bill Kirrane, general manager for the company's Nissan division, said in an interview.

"There are a lot of complaints such as wind noise, which are more design-related than things that might take the car out of service," he said, referring to the J.D. Power findings. "But we'll look at things we have to do."

Industry experts agree that productivity and success in the market are separate issues and that the buying public pays little attention to benchmarks such as factory efficiency. Nonetheless, after years of financial decline and not getting its products right, Nissan is back in the U.S. market with a vengeance.

"They've brought excitement back to their product lineup, which has jump-started everything else," Schuster of J.D. Power said. "They haven't had a miss yet in the new products they've launched under the revival plan."

Three-Year Plan Is

Realized in Two Years

To fuel this product assault on America, Nissan is adding higher-margin Maxima sedan production to Tennessee and tripling production at its engine plant about an hour from Smyrna. The company also will assemble the new minivan, large pickup and SUVs at the sprawling factory it is building in Mississippi, drawing largely on lessons learned here about quality and productivity.

"The layout of Nissan's plant areas allows a person to do the most work in the least space," said Ron Harbour, president of Harbour Associates, a Detroit-area research firm that publishes a closely watched report on auto factory efficiency. "They minimize excessive walking, put tools close to workers. The safety is right, the ergonomics are there, the parts are easy to put on, they minimize fasteners. The byproduct is pretty high quality and pretty high productivity."

That's good news for a company that was teetering on bankruptcy just a few years ago. Before French auto maker Renault bought a controlling stake in Nissan, the Japanese manufacturer lost money in seven of eight years.

Nissan President Carlos Ghosn, sent to Japan by Renault to turn around the company, devised a revival plan calling for heavy cost reductions, plant closures, an overhaul of product design and the product lineup and additional manufacturing efficiencies.

Nissan realized the main goals of the three-year plan in just two years: to get back in the black in the first year, reach 4.5% operating profit margin and halve the $13 billion in automotive debt.

Last month, less than three years after Ghosn took over, Nissan reported a record net profit in fiscal 2001, ended March 31, of $2.96 billion.

Throughout Nissan's ups and downs, the Smyrna plant, just outside Nashville, has been remarkably consistent in turning out cars and trucks more efficiently than any other factory in the country.

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