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Nissan's US operations still have a tough go, the report says



Nissan's Pathfinder is among the models in its lineup that is in great need of a refreshment to keep up with the competition.


Chris Paukert / Roadshow

It would be quite fair to say that Nissan has had quite a bad year so far. It is down to some of most powerful and influential leaders and a side effect of there has been a sharp decline in the profits and margins of the toilet, figuratively speaking. 1

9659004] Much of Nissan's problems come from the United States, according to a report published Tuesday by Reuters. The brand has had repeated problems with fulfilling its obligations to dealers, and the years of fleet sale have made great damage to resale values.

How Nissan US plans to move from a reported 45% decline in operating profit and profit margins in the range of 1 or 2% (according to CEO Hiroto Saikawa, during a press conference this week), was similar to the power plant in the Japanese car boom at 1990's?

The first step is to cut rental and fleet sales, which it had promised dealers it would do. Nissan promised its US dealers that it would reduce fleet sales from around 40% to between 15 and 17% by 2022. So far, dealers say the process hasn't started.

According to Reuters, Nissan has not given its dealers much more in the way of a turnaround plan either. Nissan has worked his product line, refreshing models as it goes, but it still has a long way to go before that process is finished.

Some of the updates have been good, especially longer range Leaf Plus and the new Altima but it is not yet clear whether these changes will be enough to bring buyers back to the brand in a period when the total demand for new cars falls.

Unfortunately for Nissan, the models in many of the areas where the market for new car sales is still strong – pickups and trucks, for example – have not yet seen the needed updates. For example, both Titan and Pathfinder show their age and their sales seem to reflect it.

Other than fleet sales, the big weapon Nissan has used to sell his cars in the US has been with deep discounts. These artificially low prices have helped get people to dealers but have damaged resale values.

As Reuters points out, other Japanese manufacturers such as Honda and Toyota excel at maintaining the customer's resale value. Brands like Nissan and American allow Ford and Chrysler to discount their vehicles greatly, and the resale values ​​are relatively low as a result.

If all this comes off as a bit gloomy for Nissan's US branch, it's just because new Nissan US boss Jose Valls has his work cut out for him. Nissan is planning to unveil seven new or renewed models over the next two years, and it's going to be his job to convince the dealers to stick to it with promises of real change from the company, as well as a truly competitive product.

Nissan did not respond I do not immediately respond to requests for comment.


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