On Friday, Nissan Motor ADR (OTC:NSANY.PK) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Net Cash Position
Kota Yuzawa – Goldman Sachs Japan Co. Ltd.: I have two questions. The first one is about net cash position. More than JPY 600 billion, this was unexpected, so I was surprised. Naturally, you’re in the season of investment of dividend and the investment, the balance between the two. Could you elaborate on this, the balance between the investment and dividend? The second one is about Datsun brand. I need elaboration about Datsun brand. If you have several brands, there are both benefits and disadvantages, you have to spend more money, this is one, why are you introducing several brands at the same time, at this timing, what’s the strategy behind it? These are the two questions. Thank you.
Carlos Ghosn – Chairman, President and CEO: Let me start why Datsun brand. Today, there is segments particularly in emerging markets where we don’t compete. We have no product offer, and we don’t think we can compete with the Nissan brand, because what is required in these markets and ultra low-cost vehicles with completely different specification, completely different expectations, that if you move the Nissan brand in this field, you end up not having too much consistency for the brand. So, we decided to introduce a new brand to be more free to adapt to the requirement of the customers. Obviously, the Datsun brand addressing these lower part of the markets that we don’t address today. We have practically no offer, and this part of the market is quite significant because in India it’s about 50% of the market, in Russia it’s about 40% of the market. We think that with the new Green Program that these region government is starting, the ultra low-cost cars are going to represent also 40% of the market, we have no offer there. So, by allowing us to be very innovative and totally focused on this particular requirement, we think this is the best strategy not only to grow the company, but also to differentiate between what the Nissan brand will be accomplishing from one side and what we can accomplish over there. It would be fair to say that the brand will be much more frugal, which means that this brand is going to be managed with lower dealer margin, with lower fixed marketing expense, with lower everything, because this is the concept of being able to address due to a low cost, and it would have been extremely difficult to do it with the Nissan brand. So, I don’t think you should see it as additional expenses. I think on the contrary it is more savings because we are allowing ourselves to have lower fixed marketing expense, lower margin for dealer, lower price in order to match the requirement of this particular customer. Now, the first question was the balance between investments?
Kota Yuzawa – Goldman Sachs Japan Co. Ltd.: No. For the – after achieving net cash of JPY 600.000 billion, a balance between shareholder return versus the balance sheet improvement.
Carlos Ghosn – Chairman, President and CEO: Well obviously, we need to have a certain amount of cash on our balance sheet. That’s obvious, and this amount of cash there is a minimum absolute amount, but there is also an amount, which is due to circumstances around us. The visibility on 2012 is really very low. We don’t know what kind of year we are going to have in front of us. We know that this is going to be another year of growth for the industry, but for example there is still a lot of uncertainty surrounding Europe, there is a lot of uncertainty surrounding Japan, there are some uncertainties in some emerging markets, I am not saying if these markets are going to grow, but what kind of growth we are going to be seeing. There is still a financial uneasiness at the level of the planet. That’s why we will continue to pile up cash during the year 2012. We have the intention to have the positive free cash flow for the year 2012, which means that we’re going to be adding to this cash. This is not an objective by itself, but just to make sure that in case of a financial, I would say, surprise we would not find ourselves in a situation where we found ourselves in 2008 or 2009. Obviously, there is a limit to this which hopefully will be set when the environment will be much clearer than what – where it is today. This being said, obviously, we are increasing the dividend by 25%, and this policy of increasing value with dividend will continue in a way hopefully which will be sustainable, and so we’re going to continue to have a strong balance sheet, increase the dividend, and the mix between the two will depend on what kind of environment we are foreseeing in front of us.
Christopher Richter – CLSA Asia-Pacific Markets: I have two questions. The first question is about business conditions in the Chinese market, some of my colleagues who are based in China have been doing channel checks of different companies, not necessarily Nissan, but are expecting some concerns about what they’re seeing in retail sales as opposed to the wholesale numbers we usually track, as well as the pricing environment, and I was hoping you could maybe comment a little bit on what you’re seeing in the Chinese market, the second question is the about the Nissan LEAF which as you said has achieved the top selling electric vehicle sales numbers, but compared to where we were originally hoping when the product first started, it seems to have started a little bit slowly. I was wondering if you could offer your thoughts on how volumes for the product may ramp up, I know, we’ve got some addition to battery capacity coming in Tennessee later in the year, but maybe an update on how we see the evolution of the LEAF and other Nissan EVs going forward?
Carlos Ghosn – Chairman, President and CEO: Well, I can – about China, we, I think, for the Nissan brand so far we are not seeing any one of the concern that you are mentioning. We’re obviously checking because we are hearing a lot of news and rumors, but the Nissan brand is unfolding very well and I can tell you, I don’t think we have a particularly high inventory, or I don’t think our dealers have a high inventory. This is not the same situation with Infiniti, because as you there is a big fight taking place in the luxury segment, and there have been some I would say a rapid movement in pricing made by some of our competitors. We did not want to participate in it, because we are more on a long-term positioning of the Infiniti brand in China. So, we prefer to cut production and reduce inventory than to consider do it. We don’t think that this is going to be a long-term solution. It looks like particularly with the German brands competing against each other, are going to be coming down this kind activity. So, I would agree on what you are saying, but we are seeing it more into the luxury segment than we are seeing it into the bulk of our offer. That’s the situation today, it may change within three months. When we discussed with the officials, they are still more bullish than us on the evolution of the economy for the year 2012 (indiscernible) of the market. We have made a forecast of 5% increase I think in China for this year. I had many meetings with many officials, who are really following the market and particularly the car market. They see between 5% and 10%. So, that means there is no reason for us to not to believe that, but for the moment we are more around 5% increase and everything we are seeing is compatible with this expect for the luxury brands. The second question is, the objectives for next year is double the volume, and we said it, that means it is obvious that this is a new car, it is a new way of driving a car. There is a huge amount of interest from the consumers, but there’s still a lot of consumers hesitating to jump into the car and buying the car, because they are worried about the infrastructure. They don’t understand always about the incentives, they want to make sure that there is no quality problem, that means there is a little bit of hesitation. We think by having more cars on the street, by people sharing their own experience saying that this is a normal car, particularly hopeful with the erratic level of the gasoline price, plus the fact that some governments as you know are taking very good action. I was in China two weeks ago and I learned about the State Council in China deciding to have 5 million electric cars in 2020 in China, and now as you know the Chinese are going after every single car manufacturer and ask them for a new energy car, if they want to expand as the basic condition for expansion. So, I think, the Chinese are very serious about electric cars, and the 5 million cars in 2020 is also something which is encouraging us to continue to invest in batteries and in cars in China. As you know, in China, we decided to put electric car under the (Winshare) brand which is part of the condition, which is fine because at the end of the day the (Winshare) brand is also our brand. So, I think we have to be patient with the development of electric car not so much because the concept is not adequate but because we need the consumer to get used to it and we need also our sales force to sell the car. I mean, this is different kind of selling, you know, to explain the car, to make people familiar with it and selling it. We used to say that we cannot innovate on engineering, innovate in manufacturing and use the same sales tactic for a car which is completely different from the other (indiscernible) to be much in a different way and sell it in a different way. But we’re still going to be selling, doubling the sales volume and that the level of lines we should be packing the 100,000 electric cars in 2012.