How will sales incentives evolve as vehicle supply increases?
Historically, an over-reliance on incentives to increase sales volume has hurt Nissan’s residual value. It will be the perfect test to see if Nissan becomes more strategic with its sales incentives as production ramps up.
Nissan needs to focus on loyalty cash instead of giving every customer a big cash incentive on the hood of every car. This allows customers to remain loyal to Nissan already within the brand, reinforcing residual value.
What does Nissan’s shift from focusing on market share to focusing on profits mean for dealers?
Nissan’s U.S. management has said it is committed to maintaining 45 days of supply in the long term. But the average Nissan dealer is skeptical.
Maintaining discipline in production can be difficult when competitors are increasing supply to gain market share. Play the long-term game of building brand value and avoid short-term sales practices that crush residual value.
Dealers should also hold higher trading prices and sell value rather than price. Gone are the days of achieving your retail goals at any cost. We must ensure that our customers become lifelong buyers of the Nissan brand.
What are dealers doing to overcome tight inventories?
Dealers are pitching into the pipeline.
Stores advertise incoming stock and post Monroney in their showroom windows with delivery ETAs. Customers can sign their name to Monroney and leave a security deposit on the car. This is efficient and has proven to be a good best practice.
Why did Nissan struggle to bring products to market on time?
Nissan, with its Japanese heritage, is a perfectionist maniac. Nissan is very concerned about ensuring their products are as perfect as possible, which is why these delays occur. I know it’s not the way it is, but let’s bring it to market,” he quickly says.
Nissan says it wants to shorten the interval between product redesigns by about two years. They’ve seen the damage of having an aging product portfolio. But it’s a delicate balance between investing in R&D and getting products to market quickly, while maximizing shareholder returns.
How has the new product changed dealer perceptions and customer demographics?
A record number of Nissan dealers are choosing to invest in new facilities. If you don’t feel your brand has a promising future, don’t spend millions of dollars building or redesigning your facility.
The franchise offers good value because of the brand’s historic struggles.Nissan stores sell cheaper than other Japanese franchises. Therefore, dealers should get a good return on their investment.
The updated product is attracting more quality buyers.The average credit score of my Nissan store customers has increased by about 25 points.
If there is a product of intrinsic value in the market, it brings higher demographics. If price is the only thing you sell, you are serving a lower demographic.
Given the growing enthusiasm of dealers in the Nissan franchise, do you think the network will grow?
Nissan has no interest in increasing the number of dealers. Instead, we want to be strategic about our network footprint. The idea is to increase dealer representation in growing markets, not replace closed stores in underperforming markets.
Nissan expects electric vehicles to account for 40% of U.S. sales by 2030. What does this mean for the dealer service and parts business?
Nissan expects 16% of the vehicles on the road to be EVs by 2030, so gasoline vehicles will dominate the units in operation for some time.
But arguably, the EV business is a key concern for future franchise dealer service and parts businesses. According to past data, [battery-powered] Leaf vehicles are half of ICE vehicles.
To soften the blow to dealers’ fixed-operation business, Nissan is offering new Leaf and Ariya buyers a free three-year maintenance package that puts customers back on service drive. To continue to be is a crack in the plate.
What does the shift to EV mean for dealer margins?
Dealers need to make more profit on initial EV sales to offset declining service and parts revenues. It still costs.
Margins for EV dealers should be higher than for ICE cars. If the dealer does not have the revenue to operate profitably in the future, the manufacturer must adjust or risk losing the dealer.Insufficient margins to operate profitably , dealers do not order EVs.
What about the early interest in Nissan’s second electric model, the Arya crossover?
You can see the excitement of many customers. This EV boom was great. Nissan has historically struggled in the western United States, especially in California. Thanks to Aria, Nissan can be more competitive in the region.
Hyundai Motor Group is leaning toward EVs, with several models planned. Should Nissan accelerate its introduction of EVs to the market?
Nissan is well ahead of its Japanese peers in the EV space, but it needs to look at the right competitors. Nissan must set its sights on South Korea and Volkswagen.
But like everyone else working hard on EVs, Nissan can win by continuing to develop compelling ICE cars over the next decade.
With many models ineligible for federal tax credits, could the Stricter Inflation Act’s strict eligibility rules slow EV adoption?
The new Nissan Ariya electric crossover will be hard to sell without a $7,500 tax credit. I don’t mean to. Instead, it cuts them off from the Ariya EV and directs them to similar Nissan ICE models.
The intent of the law is good, but the enforcement is terrible. Provide longer runways to help automakers get where they need to be. It is unfair to leave manufacturers without time to ramp up US production and supply chains.
How does the redesigned Frontier help brands?
The new frontier helps conquer, and the rest of the value is great.The pickup beats the Toyota Tacoma in every measurable way. This inspires dealers and salespeople to claim that they are better than Toyota ever. It brings a lot of excitement and energy to the showroom and customers feel it.
Titan doesn’t have much market traction. Should Nissan enter the full-size pickup segment to remain competitive?
The full-size pickup offers an upgrade path for Nissan’s Frontier pickup customers who want more features. We don’t want our customers to be lost to full-size brands. Having a wide range of truck models is important when selling to commercial customers who prefer to source the same brand fleet for maintenance reasons.
What new products are you interested in?
With inflation rising, the redesigned Kicks crossover will likely be a winner when it hits the market early next year. , sportier and tougher than the current Kicks.
What is missing from Nissan’s portfolio?
Dealers want midsize electric pickups. Frontier hardbodies have been part of the Nissan brand for decades. It is logical to bring the electric version.
The all-new GT-R supercar will bring excitement to Nissan’s engineering and attract mainstream buyers.
how is it [email protected] A digital platform to help dealers?
About 75% of Nissan dealers have adopted a digital platform. This allows the customer to move forward with the car-buying process. It creates sales opportunities for dealers and allows them to compete with online retailers like Carvana.
What improvements would you suggest for Nissan’s digital retail efforts?
Dealers are at their best when they have more options for different sales processes based on local market conditions. There are many third-party solutions in digital retail, and it would be nice to have more options.
Also, the dealer [email protected] platform.