Nissan Is Making Dealerships Angry as It Demands Up to $140,000 in Fines
Nissan is a long-standing, reliable brand that’s popular with consumers. The automaker has had its high points, such as the 2021 Rogue. However, Nissan has also experienced plenty of lows, such as massive recalls. But now dealerships are up in arms over something they claim the brand has done.
Nissan was founded in Japan in 1934. It survived World War II, exported the famous Datsun, and became the first Japanese automaker to win the Deming Prize for engineering excellence in 1960, according to History. After the award, the energy crisis over the next decade helped boost the demand for fuel-efficient cars. So Nissan expanded into more foreign markets, including the United States. Now the company is in 17 countries and is one of the largest auto manufacturers in Japan.
The carmaker’s cash-hungry moves
Nissan seems to be experiencing another bump in the road similar to the one it encountered in the ’90s. Back then, an alliance with French carmaker Renault turned things around. But today, Nissan isn’t going about things the same way. Now it seems to be more concerned with turning a profit no matter who it affects. The automaker has been involved in money grabs before. And it’s been dealing with financial woes since at least 2019.
In trying to turn things around, Nissan announced it would cut 20 percent of its global line-up in favor of newer models. The carmaker also decided to cut production, corners, and, yes, jobs. But Nissan is ramping up in other areas, mainly by increasing factory audits as it goes into 2021. Nissan claims it’s to make up for missed audits and ensure dealerships are playing by the rules. Usually, 3 percent of dealerships would be audited per year. And though Nissan promises this number will increase, it isn’t saying by how much. Instead, it added that it already under-audits warranty claims.
The Truth About Cars may have offered the best explanation yet. It says Nissan has “a real desire to make sure dealerships are in tip-top shape, with the ability to pad its revenue via audits being an added bonus.” But dealerships are feeling attacked.
How dealerships are responding
Dealers aren’t happy. They’ve already experienced little to no profit because of Nissan’s incentive program changes and already shied away from selling new cars. Used cars became the go-to for hitting sales numbers. In their eyes, dealerships feel bullied. They’ve already seen an increase in factory audits, and Nissan’s National Dealer Advisory Board has heard from members about the carmaker issuing demands of up to $140,000 in repayment. And the audits aren’t due to suspicious sales or warranty claims, so they appear even more callous.
Automotive News has insight on the issue, explaining the financial motives behind Nissan’s moves and what else might be behind the changes. The publication interviewed one dealer who was recently charged back almost $60,000 in warranty claims. “Nissan has lost more money than they’ve ever lost in 20 years,” he shared. “It’s an easy way for them to get cash.”
What other people think
On one Reddit thread, the lone commenter had plenty to say about the situation. He lamented that the fines had nothing to do with the cars being fixed correctly or satisfied customers. Instead, he explained, Nissan was nitpicking about things not being written or printed correctly on paperwork. He predicted that thousands of jobs would be on the line and that smaller dealers could take the brunt of the fallout, with technicians being especially targeted. He added that, as someone who works at a dealership, there’s no training on paperwork most of the time.
His thoughts on why Nissan was after the money: “Nissan is paying out hundreds of thousands on recalls/repairs for the utter garbage they manufacture.” He also predicted more technicians would close up their toolboxes and walk away, adding to the industry’s shortage.
Is this the end of Nissan?
Nissan isn’t necessarily disappointing fans, but any financial burdens dealerships encounter will likely be passed down to car buyers. If the automaker can’t get past being cash-hungry, it might have a problem down the line. Car manufacturers have made plenty of mistakes before and come through OK, so only time will tell how Nissan fares.