Making Light Commercial Profitable “The auto industry has traditionally viewed light commercial vehicles—what we call LCVs—as factory-fillers; vehicles that were fine to turn out as long as they were marginally profitable. The difference today is that we think Nissan can profitably market LCVs in every segment and territory. Over the last two and a half years, for example, we’ve turned things around from a loss to an operating profit margin of 4 percent. That figure already exceeds the industry average. Now we’re committed to bringing LCVs into line with the other areas of Nissan’s business. By fiscal 2007, we plan to have an operating margin of eight percent and a 40 percent increase in volume to 434,000 units. That will bring us into the top rank of LCV producers and to the top in profitability. One big consideration is that the average model in our lineup today is nearly ten years old. Creating a breakthrough with a lineup this old is difficult, and we examined the worth of continuing in this line of business. In the end, we decided to stay in and aggressively pursue profit. We came up with six strategies to make that happen: •  Renew the portfolio.  During NISSAN Value-Up, we will start and finish nearly nine new vehicle actions.  •  Reduce cost and increase value. We will accomplish these goals with the same customer-centered techniques used for passenger vehicles since the Nissan Revival Plan. •  Enter new territories. The market in Japan is flat or trending down, and there are many competitors in Europe. But China is an emerging market, and we have a strong relationship with Dongfeng, our partner there.  •  Pursue OEM deals. We’re open to cross-badging our vehicles under somebody else’s name.  Nissan Annual Report 2004 26 ANDY PALMER Vice President WHO WE ARE AUTOMOBILES Light Commercial Vehicles