Nissan: From a Precocious Export Policy to a Strategic Alliance with Renault

Nissan Motor took an aggressive approach to exports and overseas production, especially in the 1980s, when it adopted a bold strategy for internationalization. This expansion of export and overseas production supported Nissan’s growth and it succeeded in transferring its production system overseas and forming a global network. However, Nissan revealed weaknesses in product development and marketing in the 1990s. It was unable to respond effectively to the decreasing domestic market and chose to survive as a global maker by forming a capital alliance with Renault. Several explanations, related to the loss of its market share at home, have been given for the path that Nissan followed. These explanations included labour relations in which the labour union interfered with management prerogatives (Kamii, 1994; Saga and Hanada, 1999), weak marketing and sales functions (Shimokawa, 1994), the classical profit strategy of ‘volume and diversity’ (Freyssenet, 1998), and a lack of integrated management (Ghosn and Nakagawa, 2001). This chapter investigates the process through which Nissan Motor internationalized and the effects of this. The internationalization process involved exports, overseas production, transfer of the production system to foreign plants, and the capital alliance with Renault. The salient questions to ask are: Why did Nissan pursue an aggressive internationalization strategy? How did it transfer the production system? Why did it fall into financial crisis and choose a strategic alliance with Renault? How do they construct a strategy for survival?