CARLOS TAVARES Executive Vice President Building on Strengths  and Being Innovative “The Planning Group covers a great deal of corporate territory and handles a number of key responsibilities within Nissan. Our Corporate Planning division, for example, oversees strategy, setting the Company’s long-term course under the Executive Committee’s direction. The two creative divisions, Design and Product Planning, create value for the customer. Together, those three divisions form the core of our group, surrounded by several other key divisions. Market Intelligence supports Design and Product Planning in customer understanding. The people in Process and Resource Management provide the practical direction and restraint a company of our size must have when deploying its resources. And Program Management drives the implementation process, turning the work of all the other divisions into reality.  The role of Corporate Planning is to look to the future and devise ways to take advantage of the business opportunities we identify. In the past, the division relied primarily on three-year plans such the Nissan Revival Plan and NISSAN 180. That strategy served the interests of Nissan stakeholders well.  The Company is now sound, and the power and constancy of vision Corporate Planning provides will determine how well Nissan maintains its strength. However, in addition to the mid-term plan, we have now entered a phase that requires us to extend that vision and implement a longer-term plan. Corporate Planning is working closely with the Executive Committee on this matter. Design and Product Planning are central to the creation of Nissan’s strength. Both focus on satisfying the consumer’s unmet needs, and create value in the process. Our product planning DNA is to identify and target our customers, and do it better than our competitors. Rather than simply throwing a product into the market and waiting for a response, we first seek a deep understanding of the expected response. Only then can we create a product consistent with that understanding.  Our Market Intelligence division, which supports the Design and Product Planning teams as well as other divisions throughout the Company, is relatively new. The division’s experts not only supply research data, they also help shape surveys to answer precise questions and identify the traps that are often hidden within surveys. One challenge for the Market Intelligence people is to clearly communicate their conclusions to the Company’s decision- makers. If only their peers are able to understand the data they produce, their efforts and the data itself serve no purpose. In addition, this division is challenged to standardize and extend best practices globally, while maintaining a regional focus when appropriate. One key for both creative divisions is to focus on “customer clusters.” We refuse to spend our money to develop products that should please everyone. In fact, we may invest in a certain innovation because we understand that a particular subset of customers will appreciate the performance it provides. Our process is very focused, and may even target a smaller customer cluster that no one else is addressing. The marketing process for these two divisions is deep and accurate. This creates value through differentiation. The NISSAN Value-Up plan is about focusing on strong products that reinforce our brand, pursuing new concepts and innovation, and expanding geographically in a stronger and faster way. During the Nissan Revival Plan and NISSAN 180, we introduced some influential and innovative models— the Murano, the Z, the FX and the X-TRAIL, to name a few. It would be a mistake not to capitalize on those successes and reinforce the brand. At the same time, we cannot rely solely on our current concepts. Launching a new product naturally requires significant expenditures, because awareness and understanding must be created for the new product. We must differentiate to succeed, devise new products and concepts, and venture into areas that others have not. During the NISSAN Value-Up period, we will offer products that build on past successes—without being conservative—as well as products that are new and innovative. Our brand pyramid shows us the way to be both ‘bold and thoughtful.’ Nissan Annual Report 2004 34 OUR WORK PLANNING