## 2. Risks related to Business Strategies and Maintenance of Competitiveness 

## 1) Product Strategy 

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> 

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. 

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. 

• 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. 

## 2) Quality of Products and Services 

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. 

• 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 

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 

