NASHVILLE -- Nissan expects that this month's cuts to suggested retail prices on seven key models will put the brand on more Internet vehicle shopping lists.
But the price cuts also could improve a problem that Nissan believes is holding back its U.S. market growth: consumer perceptions of its brand value.
If Nissan dealers can hold the line on retail transaction prices despite lower manufacturer's suggested retail prices, that will translate to higher residual values for its cars, says Larry Dominique, president of ALG, the auto value forecasting company. That is because residuals are calculated on sticker price, not selling price.
The company said last week that it is cutting sticker prices by varying amounts on the Altima, Sentra, Maxima, Rogue, Juke, Murano and Armada. The cuts, effective Friday, May 3, range from $580 on its volume-leading Altima, which was redesigned for 2013 and was the best-selling car in the nation in March, to $4,400 on the Armada full-sized SUV.
Nissan has had some success in residuals from reducing the sticker price on its electric Leaf, says Dominique, who was Nissan's head of product planning for the Americas until September 2011.
The $6,000 reduction in the 2013 Leaf's sticker price was responsible for its gain of 4 percentage points in residual value, according to ALG.
More immediately, the sticker price cuts will help the affected models pop up in more online vehicle searches, says Jose Munoz, Nissan Motor Co. senior vice president for sales and marketing for the Americas.
"What we saw is that, in some versions of some [phones], we were not on the shopping list because we did not have the appropriate MSRP," Munoz says.
Consumer sites such as Edmunds.com and Cars.com ask shoppers to narrow their searches by picking a price range or a "maximum" amount they will pay. Such screens, designed to help shoppers narrow the field, can leave models off the consideration list because of a difference in sticker price.
Munoz says the price cuts were unrelated to the recent depreciation of the Japanese yen. Three of the reduced models are imported from Japan -- the Rogue, Juke and Murano. But the Rogue and Murano are scheduled to go into U.S. production.