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## What changes did Nissan implement in response to last year’s disaster, and what did you learn? 

Broadly speaking, we did not fundamentally shift our strategy, plans or business model as a result of last year’s disasters. Frankly, our experience during these events validated our existing plans—for the most part, our responses were continuations of strategies, priorities and plans already in place. 

In our localization strategy, for example, we have been working to better balance our manufacturing and sourcing footprint to our sales footprint since the start of the financial crisis in 2008. Our goals at that time were to reduce foreign currency volatility and cost. Today, we also see benefit in terms of reducing supply-chain risk arising from production interruptions. These strategies and initiatives are in various stages of implementation. In fiscal 2010, we began local production and sales of the V-platform global compact car in Thailand, India, China and Mexico, and in January 2011, we announced a plan to increase local production of fully built-up units from approximately 69% in 2010 to 85% by 2015 in the Americas. This includes production in Smyrna, Tennessee, of the new Infiniti JX and Nissan LEAF in 2012, as well as the production shift of the next-generation Rogue from Japan to Smyrna in 2013. 

A second example relates to our focus on a strong balance sheet and sustained free cash flow generation. Our actions in recent years to prioritize free cash flow, eliminate automotive net debt and reduce reliance on short-term debt greatly helped us to handle last year’s disasters. We now have a much stronger automotive balance sheet and liquidity position—we continue to benefit from this even today as we face renewed market volatility related to the euro-zone crisis. 

Perhaps the key change we did make as a result of our experience during the disasters of 2011 was to modify our purchasing process to enhance business continuity plans at the parts level, particularly for critical components, and to mitigate certain supply concentration risks. These modifications, though, are more evolutionary kaizen  changes rather than fundamental overhauls to our sourcing strategy. 

## How do you evaluate the first year of the mid-term plan? 

The past year has certainly been challenging as we worked to overcome the impacts of the natural disasters in Japan and Thailand and the unrelenting strength of the yen. Notwithstanding the adverse environment, I think it is fair to say that Nissan had a solid start to Nissan Power 88, making progress in all of the key metrics of our business. 

In fiscal 2011, Nissan’s global sales reached 4,845,000 units, a 15.8% increase from fiscal 2010 and an all-time record. We achieved another record with full-year global market share of 6.4%, up 0.6 points year on year. Our positive sales performance continued to be geographically broad based as we enjoyed strong growth in many of the world markets. 

