Decreased Sales Give Nissan an Incentive to Change Its Sales Strategy In North America
Dependence on fleet sales and buyer incentives to increase sales in North America has backfired on Nissan. Until last year, the company’s North American operations had always been profitable.
In 2017, Nissan’s sales on this continent dropped by 41%. By September sales had already decreased 1.4%. Charged with reversing that trend is Denis Le Vot the new chairman of Nissan North America.
Joji Tagawa Nissan’s Corporate Vice President sees the problem as a case of trying to go too far too fast. He believes his company has placed too much emphasis on increased sales when it should be focusing on increasing quality. CEO Hiroto Saikawa is in accordance with Tagawa.
He believes Nissan has to start taking some of the pressure to make sales off its North American Dealers. Some dealers are doubtful that the company will be as good as its word. One dealer’s pessimistic response to the news was, “I’ll believe it when I see it.” The question is whether or not Nissan will cave under pressure from other company’s marketing strategies. Nissan has been working with its dealers’ board to formulate the new policy.
Last summer Nissan’s American dealerships over questimated the number of vehicles they would sell. To supply a demand that didn’t exist Nissan ramped-up production. Consequently, lots were filled with more leftovers than a refrigerator after Thanksgiving.
The only solution was to sell vehicles at big losses. In the last three months of 2017, Nissan’s profits from its North American dealers decreased 37 percent.