Reading: Product Development Example

Nissan Motors

Product development: create new products that can be sold in existing markets

Showroom photo of the Nissan Leaf.

Nissan was the first major automaker to commit to the mass production of an electric vehicle (EV). In 2008, it made good on its promise with the launch of the Nissan Leaf. Industry analysts immediately recognized the significance of this major move. The Economist had this to say:

Within the industry, the adjective most often used to describe Mr. Ghosn’s plan to make the Renault-Nissan alliance the first big manufacturer of zero-emission vehicles is “bold”—in other words, somewhere between very risky and certifiably mad.[1]

In 2011, industry watchers reported the following:

When announced in 2008, Nissan’s EV [electric vehicle] program was lauded by environmentalists and derided by the auto industry in equal measure. Nearly three years on . . . it has precipitated a seismic shift towards EVs in the auto industry, with all the other automakers now following suit. But will Nissan’s heavy EV investment program deliver the environmental benefits and market share that it hopes for? It is too early to tell, but it is undeniably exciting.[2]

Eight years after the Nissan Leaf was introduced, it’s fair to say that the company’s gamble paid off. Nissan saw two unmet needs in the market that it sought to address. It recognized that the zero-emissions Leaf would appeal to the environmentally minded consumer concerned about climate change. With oil prices on the rise, Nissan saw that their electric vehicle would also appeal to the cost-conscious consumer who wants to save on fuel expenses.

Today, the Nissan Leaf is the world’s top-selling, highway-legal, plug-in electric car, reaching global sales of nearly 200,000 vehicles in September 2015.[3] The company’s product development strategy enabled it to move into a leadership position among EV manufacturers, while successfully fulfilling unmet needs in its existing markets.

  1. Mr Ghosn bets the company. The Economist, October 17, 2009.
  3. Jeff Cobb (2015-09-16). "One Million Global Plug-In Sales Milestone Reached." Retrieved 2015-09-16. Cumulative global sales totaled about 1,004,000 highway legal plug-in electric passenger cars and light-duty vehicles by mid-September 2015.