Nissan dealers in the U.S. have been through a lot. A restructuring plan taking shape at the company looks like something that can give them hope for a better future.
As Hans Greimel reported in last week's issue, the right-sizing of Japan's second-largest automaker will cut deepest in underperforming regions, allowing Nissan to redouble efforts in core markets, namely, North America, China and Japan.
Former Chairman Carlos Ghosn, who had brought Nissan back from the brink, wanted to take his touch worldwide, including to emerging markets such as India, Southeast Asia and Brazil, where he was born. But that effort didn't pan out, leaving the company with too many factories around the globe and product development resources stretched too thin.
In some ways, Nissan's global overexpansion under its onetime savior resembles the company's ambitious yet scattered approach to the U.S. market. A huge, misplaced bet on electric vehicles left too little to spend on core sedans, crossovers, light trucks and luxury vehicles.
The Nissan brand may have been weakened by years of relentless pressure for market share beyond its natural appeal. But its self-inflicted wounds weren't mortal. With investment and execution, Nissan and Infiniti can compete in the most important segments of this lucrative market.
Of course, even North America will see cuts, and the depth of the global contraction resulting from the pandemic will have a hand in the magnitude of those cuts worldwide.
The brand struggled even before the economic crisis to find the right balance of customer incentives and dealer incentives, fleet sales and discipline. Volumes fluctuated wildly from month to month, as leaders tried to concoct a new approach to the pivotal U.S. market, Nissan's second-largest behind only China. Still, that short-term volatility reflected some direction toward a healthier business.
"Invest in America" — even at the expense of other markets around the globe — will never be unpopular with U.S. dealers. In this new plan, Nissan's leadership needs to make clear that its retailers are valuable partners, not just a troublesome funnel for factory output.
If the company can win back the trust and collaboration of its U.S. dealers, the future of the company — and its retailers — can be a more hopeful one.