YOKOHAMA (Kyodo) Nissan Motor Co., Japan’s second-largest automaker, will pull up stakes in Tokyo and return to its Yokohama roots by 2010 in a bid to catch up with rival Toyota Motor Corp., Japan’s No. 1 automaker, partly by lower costs.
On March 25 last year, Nissan President Carlos Ghosn and Yokohama Mayor Hiroshi Nakada cut the tape on an engine museum at Nissan’s founding plant in Takaracho, Kanagawa Ward, to celebrate the company’s 70th anniversary.
Fifteen months later, the two held a joint news conference to announce Nissan would move its head office to Yokohama from Tokyo’s Ginza district by 2010.
Nakada nodded while listening to Ghosn’s statement that, to keep its identity, a global enterprise should regard the place it was founded as important.
The encounter between Ghosn and Nakada at the tape-cutting ceremony helped Nissan to decide it should relocate its head office to Yokohama, a decision opposite to those of most big companies, which move their head offices to Tokyo.
Nissan elected to relocate because it currently rents a building in Ginza with outdated facilities, which make it difficult for the company to keep up with information technology trends.
There were several potential locations in Tokyo for the new head office.
“We did not choose Yokohama solely because it is the birthplace of our company. We chose the city because the mayor quickly responded to our idea and requests,” Nissan Vice Chairman Takeshi Isayama said.
He said Ghosn, called a cost-cutter for his work reconstructing Nissan, focused first on relocation costs.
To assist the cost-sensitive company, Mayor Nakada hastily put in place an ordinance to support enterprises relocating their head offices to the Minato Mirai 21 District, a business complex the municipal government has created along Yokohama’s waterfront.
The ordinance halves fixed-asset and city-planning taxes levied on advancing enterprises, regardless of their size, for five years and extends a 10 percent subsidy to invested capital of up to 5 billion yen.
Some municipal assembly members opposed the ordinance, saying such treatment was excessively generous, but it was passed by majority vote.
Yokohama, a leader in Westernization since the Meiji Era, has produced many famous enterprises, including Maruzen Co. But in recent years, most have moved their head offices to Tokyo.
Subsequently, the volume of cargo handled at Yokohama port has become less than that of the South Korean port of Pusan.
Although the city’s population is the second-largest in Japan at more than 3 million, its economy has been sinking and efforts to get companies to relocate to the Minato Mirai district initially had poor results.
“Therefore, Nissan’s return is an epoch-making event for Yokohama. Inquiries from companies about the ordinance are increasing,” said Takayuki Kaneda, chief of the municipal city management bureau.
Video game company Sega Corp. is also looking at transferring its head office to Yokohama.
Nissan’s consolidated sales of 7.4 trillion yen equals the total sales of 85 companies in Kanagawa Prefecture listed on the Tokyo Stock Exchange. Its head office relocation will have a large ripple effect, business analysts said.
Kaneda said: “Yokohama’s advantages have been rediscovered with its efficient port facilities and closer access both to Haneda and Narita airports. (It is) not inferior to Tokyo.”
Isao Konno, who was an employee at the Yokohama plant for more than 40 years, said: “I’m so happy to learn that the head office will return. This summer, the festival at Takaracho attracted more people than usual. It’s going to be lively again.”
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