Nissan counts on a product wave to lift U.S. business

TOKYO — Nissan Motor Co. may be trimming its model lineup as part of its new revival plan, but CEO Makoto Uchida says U.S. dealers are poised to benefit thanks to a wave of fresh product.

The coming surge cues off the redesigned Sentra compact sedan and will include the next-generation Rogue compact crossover this year as well as an expected redesign of the Frontier midsize pickup and fresh Pathfinder and Infiniti QX60 midsize crossovers.

In unveiling Nissan's revised midterm plan late last month, Uchida also said a production version of the Ariya full-electric crossover will debut in July. A presentation of Uchida's new business strategy concluded with an image of a new-generation Z sporty coupe also.

But the fresh product comes as Nissan vows to trim its number of nameplates 20 percent to shrink its global lineup to under 55 models from 69. The automaker will focus on a smaller number of more profitable core models and introduce them more quickly to keep the lineup younger and fresher.

The rejuvenation will bring 12 new or updated models worldwide over the next 18 months.

U.S. retailers can expect eight such models in the next 28 months, Nissan said. That rollout will reduce the average age of Nissan's product portfolio from above 5 years currently to close to 3 years.

Uchida conceded that the effort to improve Nissan's business in the U.S., the automaker's second-biggest market after China, is a slow one.

"Although we are making efforts to improve net revenue per unit and to control incentives, it is taking significantly more time than initially expected," Uchida said. "We are discovering the difficulty of restoring a brand that has been damaged."

Under the midterm plan, called Nissan Next, the automaker wants to cut about $2.78 billion in fixed costs and reduce global production capacity from 7.2 million to 5.4 million vehicles.

To get there, Nissan will cut shifts at some factories, close plants in Indonesia and Spain and realign its U.S. production footprint.

The reconfiguration will boost factory utilization to 80 percent from around 70 percent today.

The company plans to achieve the bulk of the targets in the fiscal year ending March 31, 2024. Nissan's sales target is around 5.4 million vehicles by then, up from 4.9 million units in the just-ended fiscal year.

Uchida also wants to achieve an operating profit margin of 5 percent and a sustainable global market share of 6 percent by March 31, 2024. The company said it currently has a worldwide market share of 5.8 percent.

But rekindling the crucial U.S. business is a top priority under Nissan Next.

In May, the company announced a leadership shuffle. Regional Chairman Jose Valls will leave the company Monday, June 15, and his duties will be assumed by Jeremie Papin, Nissan's finance chief for North America.

Nissan COO Ashwani Gupta, the prime architect of the turnaround, said the U.S. strategy hinges on improved dealer relations and refreshed product.

The plan springboards off the Nissan Drive 2020 program introduced this year to increase marketing outlays, incentives and bonuses.

The goal is to restore dealer profitability and morale after the company pulled back too drastically on fleet sales and costly factory incentives in recent years.

Nissan can afford to do it now, executives say, thanks to the wave of new product that began with the Sentra this year.

Gupta said he wants combined Nissan and Infiniti U.S. retail market share to be around 6.5 percent.

And he wants to cap the percentage of fleet sales below 18 percent or 19 percent, the U.S. market average. That's down from Nissan's high of 25 percent to 27 percent, he said.

"When we get the new Rogue and so on, we will have more engagement on quality of sales," Gupta said. "It's momentum. Once it gets in, then it moves by its own."