Nissan has a long history that dates back more than 100 years. For much of that time, the automaker has enjoyed impressive sales and a stellar reputation. However, a recent decline in sales has left the company’s financial future in question. But don’t count on saying goodbye to Nissan just yet, as executives are confident they have a way forward. A CNBC video highlighted the company’s strategy.
The Nissan controversy
Nissan is still suffering from a fallout surrounding its previous CEO, Carlos Ghosn. Many claim that the executive’s sales goals were overly ambitious, resulting in Nissan executives using questionable business practices. These questionable practices in turn alienated dealerships, who were often forced to drastically slash prices to meet their sales goals.
This sales model resulted in many dealerships across the country losing money. Eventually, Nissan sales declined to the point that thousands of layoffs became necessary. The Coronavirus (COVID-19) pandemic further weakened sales, resulting in billions of dollars in losses during 2020 according to Auto Blog.
Ghosn himself was arrested in 2018. According to authorities, he was embezzling funds from Nissan, then diverting them to his own bank account. Ghosn escaped in late 2019 and is believed to be hiding out in Lebanon. The fact that he is now an international fugitive has further reduced consumer confidence in the Nissan brand.
Cutting expenses isn’t easy for companies
Despite its troubles, Nissan is not ready to throw in the towel. It has recently announced a plan to cut production by around 20% until 2022. This has resulted in around 20,000 layoffs in Europe and approximately 10,000 layoffs in the United States. At the same time, the company plans to reduce the number of available models from 69 to fewer than 55.
Introducing new products is going to be key
Nissan also recognizes that to be successful, it will need to introduce new products. The company hopes that by doing so, it will renew consumer interest in the brand. This is important, as much of the Nissan line is several years old, including the Leaf.
Many auto industry experts agree. Karl Brauer, Executive Analyst at iseecars.com, stated in the CNBC YouTube video:
“There’s nothing a great product can’t fix. That’s true if you’re an automotive company and whether you are already making great products and doing fine or in a tailspin and doing terribly… if you can make great product, you’d be surprised how many other problems you can have and survive.”
The Nissan latest models
For now, Nissan is staking much of its comeback hopes on the all-new Ariya. Arriving for the 2021 model year, the Ariya is an all-electric crossover SUV, and the first new electric vehicle introduced in more than a decade. The company hopes it will appeal to a wider market, as SUV sales now make up a large percentage of auto purchases.
Also in the works is a brand new “Z” sports car. When first introduced in 1970, the original 240Z dramatically changed how Americans viewed Japanese automobiles. The latest Z will also be the first of its type released in more than a decade. By releasing this sports car, the company hopes to revive some of the passion associated with some of its earliest models.
Carbon fiber process
Nissan also claims that it has refined the carbon fiber manufacturing process. Carbon fiber is a material most often associated with luxury brands.
By manufacturing carbon fiber more economically, the automaker hints that it will make the material available on more of its models to give it an edge over the competition.
The way forward
In 2019, then CEO Hiroto Saikawa proclaimed that Nissan had “hit rock bottom.” Even so, current CEO Makoto Uchida is not ready to give up. He’s confident the company will overcome its challenges and regain its market shares. With a solid plan in place, it might be premature to completely dismiss Nissan.