This article talks about the dramatic comeback of Nissan under the leadership of Carlos Ghosn. Nissan started losing its way amidst rising competition in the early 90s. Mounting debt burden and several internal problems choked the hope for survival. Renault saw a promising opportunity and took management control of Nissan in 1999. Renault sent Carlos Ghosn to Japan to spearhead the turnaround efforts. Ghosn made one of the most breathtaking business turnarounds of all time by taking Nissan from the brink of ruin back to profitability in just two years.

Nissan was Japan's second largest car maker. The company was well known for its technological competence. Throughout the 1970s and early 1980s, Nissan along with Toyota led the Japanese foray into US car market. By 1985, Nissan was exporting 8,30,000 vehicles to US, making it the second largest exporter after Toyota. Nissan's competitive position steadily weakened during the late 1980s. Stiff competition from rivals Toyota and Honda, and a sudden appreciation of the yen contributed to this downtrend. Added to this was the highly bureaucratic structure within the organization. When Japan's economy boomed in 1987, Nissan doubled the production capacity and strengthened its sales network. As a result Nissan's debt burden rose to $22 bn by 1999. When the Japanese economy went into a recession, Nissan found itself in a debt trap.

By the late 1990s, Nissan had reached the point of no return. Its margins were notoriously low. Nissan2 lost $1000 for every car it sold in US due to lack of brand power. The company (with the exception of 1996) had been making losses since 1992. Its total domestic market share had fallen from 17.4% to 13.3% at the end of first half of 1999. Its global market share came down from 5.8% in 1988 to 4.9% in 1999 and its net indebtedness was more than ¥2.1 tn.

Several internal problems also plagued Nissan. The company had fostered a culture where people found fault with each other for problems. Managers did not have well-defined areas of responsibility.

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