With profitability in freefall and showroom traffic down, Nissan U.S. dealers will have one tough question for factory reps at the brand's make meeting: What's the gameplan to lift Nissan out of its funk?
It would be a fair question. About 40 percent of Nissan's U.S. dealers are losing money or just breaking even. To survive, many are abandoning low-margin new-car sales and leaning on CPO and used vehicles to keep the business running.
At one store, Carriage Nissan in Gainesville, Ga., new-car sales have dropped 45 percent in the past year.
"We're lucky if we hit 40 cars a month now," owner David Basha told Automotive News. "In our market area, no one's coming close to their new-car numbers. They are having to sell used cars to make money."
The dealer malaise tracks with Nissan's reduced market performance.
Nissan Division's U.S. sales slumped 8.7 percent to 1.22 million vehicles last year, in an overall market that was down just 1.2 percent. U.S. market share for the brand has dropped 1.2 percentage points to 7.2 percent over the past two years and is at its lowest since 2012. Nissan says the year-over-year slide is partly a result of its decision to cut back on its sales to rental fleet customers.
Despite the trend lines, dealers remain hopeful that a wave of new product will revive consumer interest in the brand and lift transaction prices. About 70 percent of the Nissan portfolio is expected to be updated in the next 18 months.
In January, nine Nissan dealers echoed their concerns to Nissan's new global CEO Makoto Uchida at Nissan North America headquarters in Nashville. They sought marketing and incentive support and changes to Nissan's dealer bonus program.
Nissan's U.S. management apparently got the message. On Thursday, Feb. 13, Nissan told U.S. retailers it will boost marketing outlays by nearly 60 percent from last year and more than double the dealer sales-volume bonuses to help drive foot traffic at stores and lift dealer profitability. The monthly dealer volume bonus for the February-to-September sales period will increase from the current $250 per vehicle sold to $550 per vehicle.
Whether that's enough to quell dealer protest or bring customers back into showrooms remains to be seen.