Nissan spent the past two years revitalizing its vehicle portfolio — and its dealer relations.
It's beginning to pay off.
"I used to get three to four calls a week from dealers saying, 'I just want to jump off a cliff,' " Nissan National Dealer Advisory Board Chairman Scott Smith told Automotive News. "Last year, I didn't receive one call from dealers despondent with the franchise."
A lineup reboot, which involves 10 new or updated models, has rekindled consumer enthusiasm in the Nissan brand. Management, meanwhile, jettisoned a controversial sales program that dealers say fostered chronic discounting and destroyed profitability.
"The temperature of the dealer body right now is very good," said Smith, president of Smith Automotive Group in the Atlanta area. "Nissan should never give the dealers a reason to not trust them again."
The Nissan brand ranked No. 15 out of 32 in the Summer 2021 National Automobile Dealers Association Dealer Attitude Survey — a barometer of how auto retailers feel about their franchise. It was a marked improvement from Nissan's No. 25 ranking a year earlier.
A resurgence in brand confidence lifted Nissan's U.S. sales 12 percent last year, a sharp reversal from 2020 when the automaker suffered its largest annual percentage decline.
But momentum can turn on a dime.
Nissan's recent profit-before-volume business strategy has gotten a lift from the industrywide supply chain shortage, which took 130,000 vehicles out of Nissan's North American production last year.
Smith said he has received assurances from Nissan leaders that they intend to stay away from pushing vehicles on dealers, even once supply constraints ease.
"Nissan realized overproduction created damaging problems," Smith said. "I could not imagine Nissan would ever want to ever go there again."
Smith, 57, spoke with Staff Reporter Urvaksh Karkaria about the headwinds and opportunities facing Nissan dealers in the year ahead. Here are edited excerpts.
Q: What are the Nissan dealer board's top agenda items for 2022?
A: The sales audit program must be revamped, similar to what Nissan did with its warranty audit program. If there's fraud, there's fraud. We recognize that. But if somebody makes a clerical error on how an incentive was applied, it shouldn't cost the dealer anything and we should be able to correct it.
We want to continue improving dealer-factory relationships. How the dealer views the relationship and how we see ourselves in the sales mix is key. Nissan's policies have eroded the partnership over the years. But lately, the brand has gone out of its way to make them more dealer-centric.
How significant was the decision to drop the Dealer Volume Bonus program in improving the factory-dealer relationship?
The DVB program didn't accomplish what it intended to do — which was to engage 75 to 80 percent of dealers in the program. We had some short-term wins, but everything had a long-term consequence.
Selling cars in high quantity and below cost to the public does nobody any good. It drags down resale and brand values. When we eliminated the incentive program, dealers right-sized their business and focused on selling to natural demand. Now we know what a car deal is, what it represents in profit.
Once production returns to normal volumes, we must ensure that product pricing has enough dealer margin where we don't have to rely on just a quarterly volume bonus to survive.