YOKOHAMA, Japan -- A bullish Carlos Ghosn, emboldened by bumper profits and booming sales in North America, vowed a continuous offensive until Nissan Motor Corp. achieves 10 percent market share in the United States.
Nissan's CEO is finally within striking distance of his goal.
Through April, the combined U.S. market share of Nissan and Infiniti rose to 8.9 percent from 8.2 percent a year earlier.
Only a year after slamming the company's U.S. operations as a "disappointment," Ghosn said things have turned around.
Indeed, Nissan's industry-beating U.S. sales increase and surging regional operating profits helped drive a 5 percent increase in global net income during the January-March quarter.
In the latest quarter, North American operating profit soared 73 percent from a year earlier to ¥104 billion yen ($1.01 billion), as sales climbed 11 percent to 443,000 units.
"The U.S. looks good for us," Ghosn said. "You're going to see us continuously be on the offensive in the U.S. until we reach this first milestone of 10 percent."
Ghosn said a focus on brand image and product launches bolstered sales and profits in North America. He cited the redesigned Nissan Rogue crossover, which went on sale last fall and is the first vehicle based on a common Renault-Nissan platform, as the kind of vehicle that will drive results.
The assessment was a dramatic turnaround from May 2013, when U.S. sales missed expectations and prompted Ghosn to call the United States his biggest disappointment.
After that, Ghosn brought in Jose Munoz as executive vice president for North America, and operations have steadily improved in Nissan's biggest and most profitable market.
"The basis of the strategy in the United States is making sure that the overall opinion on each one of the products we are launching is strong," Ghosn said. "Overall opinion is rising. We're gaining market share. It's very profitable."
Munoz said Nissan is expanding U.S. sales even as it cuts back on incentive spending.
Nissan trimmed its average incentive spending by $387 over the course of the fiscal year ended March 31, he said. The bulk of that came in the quarter ended March 31. In April, he added, the company reduced its incentives by more than $700.
"We have in our plans to continue to stabilize and reduce incentive utilization," Munoz said. "We can increase our net revenue and profitability per unit."
Munoz has tried to rouse dealers by dumping the stair-step factory incentives and adopting new 12-month sales goals that give the retailers greater flexibility in achieving them.
The change took effect at the start of the current fiscal year April 1. But Munoz said dealer performance was already on the mend in the fiscal year just ended.
Nissan is booking more sales per outlet and sales per dealer. The shift translated into a 26 percent increase in dealer profitability year on year, the North America chief said.
Ghosn wants 10 percent U.S. market share in the fiscal year ending March 31, 2017, as part of his Power 88 business plan.
But he also has said that he doesn't want to sacrifice operating profit margin by artificially winning share through incentives.
"This is not about buying market share," he said. "When you buy market share, you can't hold onto it." He called profit margins a hard "commitment" and said market share is a softer target.
Munoz said Nissan can win share and margin: "When I see the results we are having, I think we can achieve both at the same time."
|Quarter to 3/31/14||Change vs. prior year||Fiscal year to 3/31/14||Change vs. prior year|
|Revenues||$31.13 billion||21%||$101.96 billion||20%|
|Net income||$1.12 billion||5%||$3.78 billion||14%|
|Source: Nissan Motor Corp.|