Minoru Nakamura, president of Nissan North America Inc., acknowledged many of his company's faults last week.
Only by recognizing them can you fix them, he said at the Automotive News World Congress.
At the beginning of the decade, Nissan hoped to reap great profits from Southeast Asia. But when that economic bubble burst, there was nowhere to turn, Nakamura said.
In the past, Nissan turned from market to market in search of profits. But when Southeast Asia collapsed, Nissan's Japanese market also tanked. And in the United States, sales fell flat.
To boost American sales, it invested millions of dollars in a brand marketing advertising push. The campaign won critical acclaim, but sales continued to fizzle.
'Ordinary car consumers were more influenced by the holes in our product lineup than by the creativity of our advertising,' Nakamura said.
Poor sales led to crushing debt, which forced Nissan into its current reform, he said - reform that touches both the automaker's products and its finances.
In the past year, Nissan sold one of its headquarters buildings in Tokyo and its Japanese leasing unit. By March 1999, Nissan's debt will be pared down by $3.4 billion, Nakamura said.
Nissan's consolidated interest-bearing liabilities stood at $20.8 billion at the end of March 1998; it plans to cut them to $12.5 billion by the end of March 2001.
Nissan's captive lease penetration in the United States was shaved to 15 percent from 40 percent, and it has reduced its stock of off-lease vehicles to 10,000, he said. To streamline production, the company will slash the number of its platforms worldwide from 25 to five.
These steps will reduce volume, Nakamura said.
'But we are determined to be a company that is marketing driven, not production driven,' he said. 'We must be profitable selling in the 600,000 to 650,000 range in the United States.'
In 1998, Nissan sold 557,879 vehicles in the United States, down 15.8 percent from 1997.
Nissan has a cash hoard of about $3.4 billion, Nakamura said. The company also has credit lines totaling nearly $5 billion.
'To survive in the next century, we have to reinvent ourselves. It may be hard to remember that when we came to the United States, we were thought of as the company where engineering was most important - where cars were made to last.'