Year 2 Power 88 Innovation & Power of brand Performance Corporate Data Corporate Governance 33 2. Risks related to Business Strategies and Maintenance of Competitiveness  1) Product Strategy 2) Quality of Products and Services To secure our profitability and sustainable growth based on our future product lineup plan, in our  product strategy developing process, we monitor the impact of various risk scenarios, such as global  market changes and demand deteriorations, to our future profitability (COP) based on our plan. <Example of Risk Scenarios> We periodically monitor the impact of these scenarios to secure our future profitability and  sustainable growth, and also update our future lineup plans periodically based on the results. To  improve the robustness of our product lineup against these risks, we take the following  countermeasures as our main direction when planning our product strategy. Nissan is making a companywide effort toward “Enhancing Quality,” one of the six areas of focus  defined by Nissan Power 88, our mid-term business plan through fiscal 2016. Under this plan, actions  are being carried out with numerical targets for the following areas. For example, the target for “product quality” is to attain the top level in the Most Influential Indicators  (MIIs) in each region. In order to achieve the target, internal indicators for each model correlating with  the MIIs have been established. Progress of all quality improvement activities is monitored on an  ongoing basis with those internal indicators.  With respect to new model projects, in order to achieve quality targets, milestone meetings are held  for processes from design, production preparation and production, at which key check points are  confirmed, such as achievement of quality targets, prevention of recurring problems, and adoption of  measures for potential risks related to new technology and mechanisms and design changes.  Commercial production can be started after confirmation at the Start of Production (SOP) Judgment  Meeting, which confirms all issues are solved and quality target can be achieved. Final decision that  the model can be sold is made at the Delivery Judgment Meeting after confirmation of the quality of  commercial production and preparedness for service/maintenance. As described above, Nissan is implementing thorough quality checks before new model launches.  Nissan is advancing quality improvement activities after launch as well by constantly gathering quality  information from markets and promptly deploying countermeasures if problems arise. In case safety or  compliance issues do occur, necessary actions such as recalls are implemented with close  cooperation with market side team based on a management decision reached by an independent  process. Incidents are thoroughly investigated and analyzed, and the lessons are applied to existing or  upcoming models to prevent a recurrence.  In addition to the above described activities, such as quality assurance at new model project and  quality improvement activities on daily basis, the “Quality Risk Management” framework has been  newly developed from fiscal 2009. While quality-related risks have been assessed and dealt with for  • Product quality: Quality of our products based on the customer’s actual experiences as an owner  of the vehicle • Perceived quality and attractiveness: Customers’ impressions of a vehicle’s quality when they look  at and touch it in a dealer’s showroom • Expand availability of individual products across markets to mitigate the risk of single market  demand fluctuations. • Increase volume and efficiency per product through a consolidation and rationalization of the  portfolio to lower the breakeven point and thereby reduce the profit risk of global Total Industry  Volume declines. • Prepare a more balanced product portfolio meeting needs in a broader range of markets and  segments reducing reliance on specific large markets. Maintaining Trust Through Transparency NISSAN Annual Report 2012 1. Drastic decline of total global demand, using past examples as reference. 2. A demand shift between vehicle segments drastically faster than our mid-term planning  assumptions. 3. A demand shift from the matured markets to the emerging markets drastically faster than our  mid-term planning assumptions.