John Driebe, owner of Nissan of Elk Grove in Elk Grove, Calif., became a Nissan dealer in 2001 at the threshold of the brand's turnaround.
Driebe, 47, began selling autos in 1981. From 1989 to 2000, he had a minority interest in a Lexus franchise. When that dealership was sold to Sonic Automotive, Driebe went to work for the publicly traded dealership group.
A year later, he found a Nissan franchise that was selling only about 25 new vehicles a month. With the help of a new location, the Elk Grove franchise now sells about 160 new Nissans a month. He also owns Infiniti and Kia dealerships.
Driebe, who is chairman of the Nissan National Dealer Advisory Board, spoke with Staff Reporter Lindsay Chappell.
Nissan moved away from small economy cars a few years ago. Should we view the new B-segment Versa as a return to small?
No, what you should see is that 2006 is the year of the sedan for Nissan. The Versa will be our first entry to come out, probably in May. Then we follow that with a completely redone Maxima. We've also got a new Sentra coming later in the year and the new Altima.
But you're right in that, for the last couple of years, we were really talking about trucks and SUVs, and talking about going into segments we hadn't been in. Nissan has done very well at that, if you look at the sales growth we've had. But this is the year we really get strong with sedans again.
Any concerns about all this product hitting the market at the same time?
Gosh, I don't know how you could ever find bad news in exciting new products. That's not the way a retailer thinks. I mean, bring it on and let the retailers show what we can do.
And as you said, there are also new segments to explore. Versa is taking us to a new segment that we're real excited to be in. It's a tremendous value car, and it's really good looking. And it gets like 43 miles to the gallon without having to buy a hybrid.
What's the Versa's appeal?
Is it for a fuel-efficient car or for an inexpensive car?
I think they're one and the same. It is an entry-level vehicle, but it's not entry level as we would have defined it years ago. The cars now come standard with lots of safety features and lots of goodies. And because of technology and the improvements Nissan has made, we can offer customers some huge gas mileage gains without having to pay that big hybrid premium.
What about the safety issue?
Consumers seem to have gotten a clear message that big vehicles are safe and small ones aren't.
There are people who like big cars and worry about those things, and other people who don't. We're not going to have somebody walk into our showroom who is overly concerned with the safety of a small car and listen to a sales pitch that convinces them it's right for them. It's just a different mindset.
Even then, this new car has so many more safety features than the older small vehicles did. It's a broadening of our portfolio. With the Versa, we're selling 13 different products in 2006. Compare that with what Nissan had a few years ago. There were five models in 2003, when the Quest went away for a little while.
During the past year, profitability improved for Nissan dealerships. What led to that?
Yes, that has been happening. Average dealer net profit set a record for dealers in 2003, 2004 and 2005. In 2004 alone, sales per outlet rose 26 percent for Nissan dealers. And through October of 2005, we rose an additional 7.4 percent in sales per outlet.
So all those additional units are giving us an opportunity to make a little more money. And more in 2006. We're forecasting more than 1 million units for the Nissan Division in 2006.
At the same time, there's a move to weed out some of the lower-volume Nissan stores, isn't there?
I don't know if I'm really in a position to comment on that situation. I believe the statements made were that in some very rural areas, they wouldn't renew a dealer agreement if someone chose to sell a franchise. But they weren't planning to go in and close anything down.
In the old days, when sales per outlet grew like Nissan's, the manufacturer started talking about increasing the number of dealerships. Is that the case today?
No, they're basically looking to add these additional sales with approximately the same dealer count. That's what so exciting for the Nissan dealer body - more sales per outlet, and more parts and service growth over the coming years. Nissan realizes that their best dealers are profitable dealers who can invest back into their businesses and take care of their employees and consumers. A strong dealer is so much better. If you can't make enough money, you can't provide the right service.