Tim Hill became chairman of the Nissan National Dealer Advisory Board in August as Nissan completed its six-year drive to boost U.S. sales and market share. Hill, 50, is dealer principal of Hill Nissan in Winter Haven, Fla., a dealership that has been in his family since 1976, when it was an Oldsmobile-Datsun store.
The Nissan brand is entering a new phase in the U.S., says Hill, who will be board chairman for one year with an option to remain for two more years. Softening industry sales, coupled with higher interest rates and larger store inventories, are causing Nissan to turn its focus from pushing sales to helping retailers sustain profitability.
The change of direction occurs as Nissan dealers prepare for a batch of new products in 2018, including the Kicks subcompact crossover and a redesigned Altima midsize sedan. Hill spoke with News Editor Lindsay Chappell.
Q: Nissan Motor Co. has had some changes in key personnel. For instance, there's a relatively new CEO in Japan, Hiroto Saikawa; a new chairman for North America, Denis Le Vot; and a new head of North American sales and marketing, Dan Mohnke. What do retailers think about this?
A:There are some new people, but some of the individuals have been with Nissan for a long time. They're just in new positions. I only recently met Denis Le Vot, and I was impressed by how fast he had gotten up to speed on all of the issues and concerns and our ways of moving forward — and he had only been on board for three weeks at that time.
I think dealers, as a whole, like the things they're hearing and they're optimistic about 2018.
I'd also add that we do have a lot of stability. We still have Jose Munoz with us in his global position as chief performance officer. That will help us because he has some control over the global assets that will help us here in the United States.
But everyone is in line with the way we need to do business. Our focus really remains on dealer profitability and improving the customer experience, while also continuing to grow. Everyone from the dealers through Nissan North America to Jose Munoz and Mr. Saikawa in Yokohama are all saying the same thing, and that's good.
It was big news in February when Saikawa said Nissan will ease off on some of the U.S. business approaches that have rankled dealers. He mentioned less pressure on dealers to take inventory, reduced use of incentives, less reliance on factory fleet deliveries, more focus on dealer profitability. How did that go over?
I'm hearing from quite a few dealers and they feel this is very positive and this is the way to go. Anytime you talk about improving dealer profitability, dealers get excited.
We're eager to see the details of the plan, and we'll see them in April. You may know that the dealer advisory board meets monthly in person with all of the senior management of Nissan North America — Jose Munoz, Dan Mohnke, the heads of sales, advertising, aftermarket — every single month. But since these discussions began, about the new plans you're referring to, we've been meeting weekly by conference call to make sure we're developing the programs that will deliver on all the things Mr. Saikawa spoke about starting in April. I think that's unprecedented for any OEM.
Nissan's dealer advisory board obviously doesn't meet directly with Saikawa in Japan — but did the board have some voice in bringing these changes about at the CEO level?
I can't really say what Mr. Saikawa hears or knows. But I can tell you that, even before I heard what he said about these plans, everyone here in the U.S. organization was already saying the exact same things — Jose, Dan Mohnke, Judy Wheeler, everyone.
Was Nissan's aggressive growth over the past six years worth the consternation it caused some retailers?
When Jose came into the picture five or so years ago, the industry was growing. We got aggressive and were able to increase share and sales and dealer profitability. A lot of dealers were saying, "Oh, we'll never sell that many cars." But we did. We increased our total number of units in operation. And now we're starting to see higher profits in service and parts because all those vehicles are coming out of warranty.
When you look back at the amount of increase in market share and volume and profit, yes, it was definitely worth it. But I remember coming out of dealer meetings with Jose in the early days, and dealers were saying, "There's no way we can do this. This is what happens when somebody from outside the U.S. comes in to run things — they just don't understand the U.S. retail business."
I talk to those same dealers now and they can't believe we grew that fast. Yes, there were growing pains along the way. But we're much better off.
You know, I can remember a day when we weren't even sure there was going to be a Nissan anymore, back in the mid- and late-1990s. Carlos Ghosn came in and saved the day for all of us by keeping Nissan alive — now we're in a much better place with higher profits and about to realize new opportunities in aftermarket.
But things are changing.
Now it's time for a change in direction. And that's based on the market. Interest rates are increasing and costs to dealers are rising and total industry sales are softening. So now's the time to change the plan. And what we expect to see now is that programs are simple and consistent and sustainable. If we can have consistent, we can continue to grow.
How did 2017 end for your store?
It was a good year. Not a record. Our record years were 2014 and 2015. Total industry volume has softened a little bit, but 2017 was a solid year.
What were your big-selling models in the past few months?
Rogue has taken over as our best seller in the past couple of years. But trucks in general, all the sport-utilities and crossovers, have come on strong. The Titan in particular has begun to take hold.
What is the status of training to help Nissan dealers better compete in full-size trucks?
There has been a lot of training, and a lot of training is needed. A lot of it's new for Nissan dealers. Before, we had basically one model of the Titan. Now we're going more head-to-head with the domestics, offering many different truck variations. That's a learning curve when you haven't been selling full-size trucks.
It takes specialized training to understand the different customers in the segment, to know the differences between the diesel and the gas trucks, and long bed, short bed and all the configurations, and even the single cab, which we never had before.
And it's a different customer from those who came in in the past. Many of them want customization. Our models in the past offered a few accessories. But the Titan has all kinds of customizations. People love customizing their full-size trucks. And those accessories are good for dealer profitability.
You're in central Florida. Has that also been a strong car market?
Altima is still a good seller for us, but Rogue is really taking over. In Winter Haven, we sell a good mix of everything. People like to sit up a little higher because there are so many trucks on the road. You can tell our growth is in trucks and SUVs.
When you get closer to the metro markets of Florida, you don't sell as many trucks. But here, not far from my market, there is citrus growing, strawberry growing and cattle ranching. So there is a demand here for trucks. We do well with the Frontier pickup.
What is the Frontier's outlook, given that Chevrolet, Toyota and now Ford hope to step up involvement in midsize pickups?
There's still growth potential for us with the Frontier. And our model is one of the more aged products. Yet it continues to increase sales and win awards. It will be a focus of the brand moving forward. It's not as affected by gas prices as the full-size truck. It's steady year-round.
What happened with the launch of Nissan's 2018 models? Many came late in the year and Nissan put a lot of effort into selling down inventories of 2017s.
We definitely ended 2017 with more 2017s than we wanted. I can't explain why it was that way, but Nissan has been very transparent about it in our meetings. We've done a great job of selling down the 2017s.
What big developments are coming in 2018?
We're going to get inventories down and focus on dealer profitability. We also have new product — the new Kicks crossover, and some significant fresh vehicles. We need to get the inventory down because floorplan costs really affect your profitability.
Titan is inching up too. Titan transaction prices are higher, and that means good margin.
Where will the Kicks fit?
It's a new segment for us, so we're hoping there will be some incremental business. It will be entry-level pricing and I see it playing in that Sentra area — people who want a crossover in order to sit up higher. But I see it bringing new buyers into Nissan.
Nissan will bring out a redesigned Altima this year. What are hopes for the car?
Even when you see that the compact SUV has taken over the sales lead nationwide, the market for midsize sedans is still a huge segment for volume. No one should want to walk away from that segment and Nissan plans to grow in that market too.
Factory officials sometimes say Nissan is still a car-oriented brand. Can the next-generation Altima and Sentra do anything to recharge sedan sales?
You see these things go in cycles. You have to consider that with the strength Nissan has in sedans in general, and in the Altima specifically, I can see the cycle for sedans coming back. You never walk away from that. You continue developing it. And there are issues that make sedans important, like fuel costs.
Does your dealership do much leasing and rental business?
We participate in the Nissan rental program, but that's designed to supply our service customers. We don't do a big tourist trade in rentals. We're really outside the Orlando and Tampa tourist areas, so we can't service the airports.
Interestingly, we have put some full-size trucks into our rental fleet, and those are very popular.
How is the effort going to improve aftermarket sales across the dealer network?
It's not something that's only now starting up — it's been in the works for four or five years. Nissan has been trying to help us prepare for what's coming, with a much higher number of vehicles in operation coming through our fixed operations. And hopefully, we're going to be a better place to handle it.
Is your dealership one of the NREDI 2.0 buildings — those with Nissan's new design guidelines?
We were one of the first NREDI stores in end of 2005. I'm part of the original NREDI store design program, so I have no pressure to upgrade to 2.0 at this point. The new modernizations are really intended to upgrade the customer experience at the stores. It's more for people doing new builds, to use the new 2.0 standards.
Nissan appears to be shifting its brand identity. What is the new focus?
Our vehicles are going to be spotlighted for their cutting-edge technology. I believe you'll see Nissan having class-leading technology, such as ProPilot Assist. You see it already on the Leaf and the Rogue. It keeps you centered in your lane, in between the lines. You can almost let go of it, it performs that well.
But that's the focus of the brand as we move toward self-driving cars. Nissan will be a leader, and bring this technology into the less expensive vehicles so that everybody can have access to it.
