Nissan Motor — Company History

From Kaishinsha's DAT to the founding of Jidosha Seizo

In the early 1930s the Japanese car market was dominated by vehicles assembled locally by Ford Japan and General Motors Japan. Nissan's own line runs back to Kaishinsha Motor Car Works, founded by Hashimoto Masujiro (橋本増治郎) in 1911. The firm completed its first car, the DAT, in 1914; the name was built from the initials of its three backers — Den Kenjiro, Aoyama Rokuro and Takeuchi Meitaro. Kaishinsha was reorganised as DAT Motorcar Co., then merged with Jitsuyo Jidosha Seizo to become DAT Jidosha Seizo, and most of its shares were bought by Tobata Casting — the foundry Aikawa Yoshisuke (鮎川義介) had established in 1910. From 1931 DAT Jidosha Seizo built a small car under the name Datson, renamed Datsun the following year and sold nationwide.

Ayukawa's premise was scale from the outset: making 500 or 1,000 cars a year will never amount to a business. He was planning for output above 10,000 units. In December 1933, jointly funded by Nihon Sangyo and Tobata Casting, Jidosha Seizo Co. was incorporated with capital of ¥10 million at Takaracho, Kanagawa-ku, Yokohama. Working outward from the Tobata works, Ayukawa acquired the Yasugi plant for special steels, Totsuka for electrical components, and DAT Jidosha Seizo itself, then raised a new factory in Yokohama. For that plant he struck a deal with Graham-Paige of the United States, buying a full set of drawings, the manufacturing know-how and a complete set of idle equipment, and bringing in a large number of American engineers to supervise until production began. This was the opposite of Toyota, which took the view that foreign technology was to be studied but not imported — the two companies diverged from their first day. The Yokohama plant was completed in May 1934, and in June the company renamed itself Nissan Motor. In April 1935 the first car built end to end at Yokohama came off the line.

A licensed manufacturer under the 1936 law, and conversion to war production

In May 1936 the Automobile Manufacturing Industry Law was promulgated. Created at the strong urging of the Army, it put car manufacturing under licence — granting licensed firms government support in financing, taxation and equipment imports, while barring Ford Japan and General Motors Japan from producing above their historic volumes. Two companies were designated first, Toyoda Automatic Loom Works and Tobata Casting, joined later by Isuzu, the merged entity of Ishikawajima and Tokyo Gas and Electric. Tariffs on imported components were raised sharply, and in 1939 the two American firms ceased trading in Japan and withdrew. Inside that protected trio, Nissan's Datsun output grew steeply from 1934.

Production reached 19,688 units in 1941, and capital was raised from the original ¥10 million to ¥60 million by 1942. Wartime controls were severe, however: shortages of steel and fuel forced restrictions on passenger-car production, and every vehicle other than the truck entered a lean period. Nissan held a floor of 1,000 units a month throughout, and turned its surplus capacity to building aircraft engines. The Fuji plant — formerly Yoshiwara — was completed in August 1943. As the air raids intensified the company evacuated, moving its head office from Yokohama to Nihonbashi, Tokyo in September 1944 and renaming itself Nissan Heavy Industries.

Starting again under requisition, and the Austin licence

On the night of the surrender, American soldiers who entered the Nissan works carried off, as souvenirs, the chopsticks and chopstick boxes the workers had been eating their rice gruel with. Requisition by the US military then continued for years. Toyota, whose plants had escaped serious bombing and were never requisitioned, took a different path from this point. In September 1945 the GHQ memorandum banning passenger-car manufacture was eased, and in January 1946 the head office returned to Takaracho, Kanagawa-ku, Yokohama. In August 1947 a Datsun came off the line at the Yoshiwara plant for the first time since the war, though output after that was held back by acute shortages of materials and food. The company restored the name Nissan Motor in August 1949 and listed on the Tokyo Stock Exchange in January 1951.

In December 1952, under president Asahara Genshichi (浅原源七), Nissan signed a technical tie-up with Austin of Britain — assembling parts first and moving progressively to domestic production. The engineering accumulated in those years underwrote Nissan's own designs later on. The following year a labour dispute broke out over the union's wage demand, and both sides came through it badly. The relationship that emerged from the dispute was one of mutual trust, and it turned so cooperative that it would later be described as narehai — cosy. In return the company handed the union wide authority reaching into plant management, productivity and rationalisation. By 1955 most of the requisitioned plants had been released and production found its footing.

Betting on Oppama: passenger cars concentrated in one plant

The Datsun Bluebird, launched on 1 August 1959, and the Cedric that followed in March 1960 became the best-selling domestic passenger cars. In passenger-car output for October 1959 Nissan's 2,693 units beat Toyota's 2,498, taking first place for the first time in two years. At that point, however, production was split by model — the smaller Bluebird at the Yoshiwara plant in Shizuoka, the Cedric at Tsurumi. With trade liberalisation now a settled fact, surviving international competition demanded a plant capable of high-volume, concentrated production. Oppama was the answer to that requirement.

The Oppama plant was built on about 300,000 tsubo released from the 470,000-tsubo site of the former Navy Oppama air corps, with construction starting in April 1961. Six months later, on 1 October, a 30,000-tsubo building housing press, paint, fitting and assembly lines was finished, and full operation began in March 1962. It employed 4,600 people and ran an average of sixteen and a half hours a day, at a scale of 10,000 Bluebirds a month and 4,000 to 5,000 Cedrics and others. In April 1964 it built 10,413 Bluebirds, establishing a single-model output of 10,000 a month ahead of any rival. The Zama plant was completed in May 1965 as a dedicated truck factory.

Consolidation under the industry bill, and the push into America

In 1963 president Kawamata Katsuji (川又克二) spoke to securities analysts about the merger-and-model-restriction policy set out by MITI's Industrial Structure Council. Nissan and Toyota between them already accounted for most passenger-car production and sales, and he judged that a merger of Nissan and Toyota is unthinkable, and could not be done — if consolidation took shape, it would be other firms attaching themselves to one or the other, or several combining. On import quotas for foreign cars he saw no harm in admitting 10,000 to 20,000 units, arguing the merit of a buffer period. Exports in 1962 were 26,600 units, half of them trucks.

On 1 August 1966 Nissan absorbed Prince Motor Company. A memorandum had been signed at the Palace Hotel on 31 May the previous year, and the merger contract formally executed on 20 April 1966. The ratio was two Nissan shares for five Prince shares; the combined company had capital of $110.6M (¥40bn) and about 31,600 employees. Prince chairman Ishibashi Shojiro (石橋正二郎) put “permanent survival of the Prince marque” at the head of his merger conditions — and while the Skyline and Gloria engineering passed to Nissan, the Prince name disappeared within a few years. The Murayama plant came to Nissan with the merger.

Exports to America began with passenger cars in May 1958, and Nissan Motor Corporation in U.S.A. was established in September 1960. Exports in fiscal 1964 reached 72,000 units — a fifth of production and more than half of all Japanese vehicle exports, the highest in the industry. Close to ninety per cent of it was shipped from Nagaura, the port next to Oppama. When the dollar-defence measures of August 1971 imposed an import surcharge, the passenger-car tariff rate of 3.5 per cent meant the addition was held to 6.5 per cent. From January to July that year exports to America ran to 153,672 passenger cars and 45,517 trucks, of which the Bluebird alone accounted for 87,341.

Trade friction forces the turn to local production

The Tochigi plant was completed in March 1971 and the Kyushu plant in June 1977, stacking up domestic capacity. But when Japanese car exports surged after the second oil crisis they triggered trade friction, and the advanced economies of Europe and America turned to protection in concert. With the road of growth-by-export narrowing, Nissan steered towards production on the ground: a capital participation in Motor Ibérica of Spain in January 1980, and Nissan Motor Manufacturing Corporation U.S.A. established in July of the same year. A technical centre and Nissan Motor Acceptance Corporation followed in November 1981, and in November 1982 the Aguascalientes plant of Nissan Mexicana was completed.

For president Ishihara Takashi (石原俊), who raised the banner of “winning back 30 per cent of the domestic market” on taking office and toured the country sitting down knee to knee with dealer principals, local production was a perfect chance to internationalise and at the same time a once-in-a-lifetime chance to overtake Toyota. Starting with the American truck plant, the sites came in quick succession — the stake in Motor Ibérica, joint passenger-car production with Alfa Romeo of Italy, expansion in Mexico, a co-operative relationship with Volkswagen of West Germany. Nissan Motor Manufacturing (UK) was established in February 1984. Chairman Kawamata Katsuji, long cautious about entering Britain, came round only at the end of February 1983, when he told them to bite on that project.

The fight with Shioji Ichiro, and Kume Yutaka's cultural reset

Shioji Ichiro (塩路一郎), chairman of the Japan Automobile Workers' Union, held influence reaching into plant management, productivity and rationalisation — built on the cooperative relationship that dated back to the great dispute of 1953. For a federation alert to the hollowing-out of domestic industry, production abroad was not acceptable, and because the announcements came abruptly, rifts opened among the directors as well. The confrontation peaked over Britain. Shioji eventually stepped down as federation chairman and vice-chairman Shimizu Haruki (清水春樹) rose in his place. In December 1986 the new leadership signed a comprehensive agreement with the company aimed at a different kind of labour relationship, and the Central Management Council — where management questions had been discussed jointly — was renamed the Central Labour-Management Council.

Kume Yutaka (久米豊), who became president in 1985, held that the first thing to break was the bureaucratic hirame organisation — “flatfish,” eyes turned permanently upward, looking only inside the company. He introduced the practice of addressing one another with -san rather than by rank, brought in merit pay, and redefined labour relations as the company being a company, the union being a union. What marked the Kume years was that he went at the culture before he went at the balance sheet; the Pulsar's Car of the Year award and the hit of the Be-1 began to bring confidence back. Kume spoke of doubting the company's own received wisdom, and of how old certainties turn harmful.

The first operating loss in fifty years, and the end of vehicles at Zama

In the interim period to September 1986, Nissan fell to an operating loss for the first time in fifty years, discounting the post-war chaos. It came from a yen in the ¥140-to-the-dollar range and trade friction with America, compounded by surplus plant and people, a domestic share that had slipped below 25 per cent, and accumulated losses at the affiliated dealers. On consolidated net profit it was passed by Honda, falling to third in the industry. A company called “Nissan of technology,” maker of celebrated cars and a byword for quality, had come through labour conflict and a sliding share to a loss under a rising yen. The overseas structure kept widening even so: Nissan Europe in April 1989, Nissan North America in January 1990.

In the year to March 1993 Nissan fell to a recurring loss. Weak domestic sales after the bubble collapsed were compounded by a yen approaching ¥80 to the dollar, which squeezed export margins. President Tsuji Yoshifumi (辻義文), who had taken over from Kume, explained that every one-yen move cost roughly $45M (¥5bn) of profit, and criticised his own company as a firm that does not follow through. In February 1993 he announced the end of vehicle production at the Zama plant — the Sunny moving to Kyushu and the Presea to Murayama, cutting domestic annual capacity from 2.7 million units to around 2.3 million. Even after that, average utilisation at the domestic plants stayed below 80 per cent.

It was the first closure of an assembly plant in the Japanese motor industry. Models and parts were rationalised too — steering wheels on the Laurel cut from 86 types to 10 — but the full-line structure was held intact, and the demand for cost reduction was passed down to the keiretsu component makers. Vehicle production at Zama stopped in March 1995, and the year to March 1995 again posted the largest recurring loss on record. By the end of 1997 Honda had overtaken Nissan in monthly domestic sales, and interest-bearing debt excluding sales finance had swollen past $8.3B (¥1tn). President Hanawa Yoshikazu (塙義一) summed his company up as a culture of blaming others, saying that so long as you are saying the fault lies elsewhere, reform at home is neither necessary nor possible.

The Renault alliance and the Nissan Revival Plan

In March 1999 Nissan concluded an alliance agreement with Renault of France that included a capital participation. Carlos Ghosn, who arrived as chief operating officer that June, drew up the Nissan Revival Plan in October. Its pillars were the closure of five domestic plants, about 21,000 job cuts, the sale of keiretsu shareholdings and a reduction in purchasing costs, with total cost savings on the order of $8.8B (¥1tn). It also set out to halve interest-bearing debt excluding sales finance, from about ¥1.4 trillion to the ¥700 billion range. Ghosn said he was not a destroyer, that the most valuable resource was the motivation of the people who worked there, and that the lead role in the recovery belonged to the employees rather than to management.

After a net loss of $6.0B (¥684bn) in the year to March 2000, Nissan returned to profit in the year to March 2001. Consolidated headcount fell from 136,397 to 124,467. Vehicle production at the Murayama plant stopped in March 2001, and in March 2002 Renault raised its holding in Nissan to 44.4 per cent. Nissan took a stake in Renault in return, through Nissan Finance, and a jointly run company, Renault-Nissan b.v., was established. The purchasing-cost reduction wore down the supply chain, however: the former president of Yokoyama Kogyo, a second-tier supplier, described the bind of being unable to refuse demands because of dependence on the Nissan group as hell if you take it, hell if you don't.

Chasing scale, and the tears that opened in quality and governance

With the recovery complete, Nissan turned to growth. The Canton plant of Nissan North America was finished in May 2003, and Dongfeng Motor Co. began operating that July. In August 2009 the head office moved from Ginza, Tokyo to a global headquarters in Yokohama. In March 2017 the tender offer for Calsonic Kansei succeeded and Nissan sold its entire holding to CK Holdings, booking a gain of about $1.1B (¥115bn). In May 2016 it signed a strategic co-operation agreement with Mitsubishi Motors including a capital participation, taking the company into the group that October through a third-party allotment. When Shiga Toshiyuki (志賀俊之) urged a correction to the mid-term plan “Nissan Power 88” in 2013, chairman Ghosn was furious, and Shiga was removed as chief operating officer that year.

In September 2017 an on-site inspection by the Ministry of Land, Infrastructure, Transport and Tourism found that final vehicle inspections at Nissan had been carried out by unqualified staff. The practice had been routine at several plants by the 1990s, and at the Tochigi plant may have run from around 1979. On 6 October Nissan filed a recall covering about 1.16 million vehicles across 38 models built between January 2014 and September 2017 — some 350,000 Notes, 230,000 Serenas and 170,000 X-Trails, effectively the entire domestic range apart from kei cars. Because inspections failing the requirements continued at sites including Nissan Shatai's Shonan plant even after internal standards were revised, on 19 October the company halted shipment of domestic-market vehicles at all six of its plants in Japan. The report submitted to the ministry on 17 November attributed the cause to a failure to grasp the gravity of final inspection and a severely dulled sense of the rules.

On 19 November 2018 the special investigation unit of the Tokyo District Public Prosecutors Office arrested chairman Carlos Ghosn on suspicion of violating the Financial Instruments and Exchange Act, alleging that his remuneration had been understated by roughly $47.2M (¥5bn) over the five years to March 2015. Three days later, on 22 November, the board removed him from the chairmanship. President Saikawa Hiroto (西川廣人) said that Ghosn had grown grand, become surrounded by yes-men, made it hard for voices from the floor to reach him, and lost his strengths as a manager. The lawyer Gohara Nobuo (郷原信郎) took the opposite view, saying it can only be called a coup mounted by the Saikawa faction using the prosecutors' investigative powers as a weapon. With a trough in the model cycle compounded by weak sales in North America and China, the year to March 2020 booked a net loss of $6.2B (¥671bn). Saikawa himself resigned as president in 2019, succeeded by Uchida Makoto (内田誠), a former trading-house man described as a rationalist.

Rewiring the alliance, and Re:Nissan

In July 2023 Nissan signed a new alliance agreement with Renault covering capital participation, followed by a first amendment that November. Renault's holding in Nissan comes down from 43.4 per cent to the 15 per cent level, with the excess 28.4 per cent transferred into a trust. In December 2024 three-way integration talks began with Honda and Mitsubishi Motors, but their termination was formally announced on 13 February 2025: Nissan wanted a merger of equals, and terms could not be reconciled with a Honda that was larger.

In the year to March 2025 the consolidated net result was a loss of $4.4B (¥671bn), down from a profit of ¥426.6 billion the year before. Uchida stepped down at the end of March, succeeded by Ivan Espinosa, aged forty-six, who had been running product planning. On 13 May Espinosa withdrew the previous mid-term plan and announced a turnaround plan, “Re:Nissan”: cutting the seventeen vehicle plants worldwide to ten by fiscal 2027 through the consolidation of seven, removing 20,000 jobs — about 15 per cent of the workforce — and taking out $3.3B (¥500bn) of fixed and variable costs.

Espinosa called the plant closures and job cuts sad and painful, while saying the present scale of production was not sustainable. On 15 July he announced that vehicle production at Oppama — the home plant in the founding city — would end at the close of fiscal 2027 and move to Nissan Motor Kyushu. Contract production at Nissan Shatai's Shonan plant is to end by fiscal 2026, and on 18 July he made clear that formal talks with the union over Oppama would begin the following week. Against capacity of five million units, output stood at 3.2 million, and company-wide utilisation had fallen to 64 per cent.