LOS ANGELES - To look at it one way, Nissan Division is in trouble again: Sales are way off in a booming market, market share is in the tank and incentives have been hiked once more.
But from another perspective, Nissan is setting itself up for a big 1999, a year that will be full of new and redesigned products.
Nissan Division General Manager Mike Seergy would prefer people look at the latter scenario.
Starting next spring, Nissan Division will launch the all-new Xterra compact sport-utility and four-door Frontier pickup, a redesigned Maxima sedan and a reskinned Pathfinder with a more powerful engine.
So for now, it's just a matter of hanging in there until the new products arrive.
'We have to be strong in the next four months to hit our fiscal year targets. If we don't hit our sales target, it impacts production, which impacts consolidated gross profits,' Seergy said.
And while the head of overseas operations for parent Nissan Motor Co. Ltd., Tetsuo Tabata, has said profits are more important than volume, 'That's not my performance objective,' Seergy said. 'My job is clear. It's to hit both sales and volume targets.'
Seergy noted that making dealers profitable is equally important, and in that area he is succeeding. Average dealer profit is up 16 percent this year, he said.
Whether Nissan can show strong results in the meantime is something else.
Nissan raised eyebrows when it put $2,000 cash back on all its vehicles from June through September in an effort to reduce skyrocketing inventory. But it got what it wanted with a sales spike and lower days supply.
Since going cold turkey, however, Nissan sales have dropped sharply. In November, Toyota Camry alone almost matched Nissan Division's total of 35,957 units. Inventory has quickly jerked back to an 87-day supply as of Dec. 1, compared with the 40-day range for Toyota and Honda.
Seergy admitted that Nissan's incentive spending has been cranked back up in December, with the Pathfinder getting $2,500 in customer cash and Maxima getting $2,000 cash back; Altima remains at $1,000 cash back. Still, Seergy insists Nissan's incentive increases are not as much as those done by its competition.
'We were in incentive rehab for a while, and we still are. I am very reluctant to advertise that we have customer cash, because you just don't want that message out there. You have to be careful you don't denigrate the brand.
'I'll do whatever I have to do to sell cars,' Seergy said, 'but we're not going to be reckless.
Also, 'leasing' has become a dirty word at Nissan. After suffering severe losses in its off-lease portfolio, Nissan has slashed leasing as a percentage of sales from 31 percent last year to about 17 percent now, Seergy said.
In contrast, about 25 percent of Honda and 38 percent of Toyota volume is based on lease transactions, those companies said.
What's more, Nissan Motor Acceptance Corp. has tightened its screening process, so that those customers who do lease are generally 'A' paper, Seergy said.
The money that used to go into subsidizing leases has been put into more noticeable (and easier to budget) areas such as customer and dealer cash-back offers.
But for all these actions, the fact is that rivals Honda and Toyota are enjoying record years, while Nissan is losing ground. Sales are off 17.7 percent through November, and market share has slid to 3.6 percent from 4.4 percent last year.
SOME DEALERS DON'T LIKE IT
Said a Midwest dealer, who declined to be named: 'Nissan has created this monster themselves, because there's nothing wrong with the product. It's the marketing strategy that's horrible. All these incentives are destroying the long-term credibility of the brand in exchange for the short-term fix to get sales up.
'It's confusing to consumers, but they're getting wise to this hot-and-cold water treatment. If Nissan has $2,500 in fluff on the Pathfinder, let's get it out of the sticker,' the dealer added.
Said Mark Horey, a former Nissan manager and now president of Fountain Consulting in Las Vegas: 'The only way they can move the product is with a bag of money on the trunk. They just keep putting money on product, and they're not making inroads in market share.'
Horey also scolded Nissan and upscale Infiniti for not watching their respective brands. In the previous week's Las Vegas newspaper, facing pages showed competing ads for the Nissan Pathfinder and Infiniti QX4, both hyping a $299-a-month lease deal.
But Todd Seth, owner of two Nissan stores in Jacksonville, Fla., supports Nissan's moves.
'Other manufacturers have lowered their MSRPs, but Nissan keeps stickers up and gives dealers the incentive money, which helps with negative equity and also gives the customer more perceived value. Then the dealer can also help the customer get into the car,' he said.
He also applauded larger incentives on the outgoing Maxima and Pathfinder, in that they clear out inventory yet pique customer interest for upcoming models.
Seergy said Nissan's launch strategy will be very focused: 'We're going to be more efficient in how we reach our target audience without annoying them or intruding on their privacy.'