Cars

What Does Nissan Need to Change to Become Competitive?

Understatement of the year, but Nissan’s not feeling so hot right now. Beyond the scandals surrounding the former CEO, the automaker’s sales have slumped, and popular models like the Frontier, Pathfinder, and Armada struggle to stay competitive. Even the Titan full-size pickup truck is having a tough time. Nissan’s newest CEO, Makoto Uchida, recently came to the US to speak with several high-performing dealers about what the company needed to change. But how can Nissan take the criticism and turn it into a winning strategy?

Nissan needs inexpensive, not cheap vehicles

2019 Nissan Frontier
2019 Nissan Frontier | Nissan

One thing that was made clear in the meeting, Automotive News reported, was the perception of Nissan as a “bargain-basement brand.” Part of the problem has been previous CEO Carlos Ghosn’s tactics, which included increased rental fleet sales and financial incentives for high dealership sales. The former tarnished residual values—and when potential buyers see used Nissan prices so low, they’re not going to want to spend big money on new ones.

Genesis GV80 rear
Genesis GV80 rear | Genesis

To be clear, making affordable vehicles is not a bad thing. Traditionally, Japanese and Korean brands like Honda, Kia, and Nissan have been popular for offering competitive features at lower prices than their competition. Part of the reason why luxury brand Genesis’ new GV80 SUV is set to make an impact is because of how it offers the same kinds of features as Mercedes and BMW, only for thousands of dollars less.

However, making affordable vehicles can sometimes result in thin profit margins. Especially if your production costs are high, like Nissan’s were in the early 90s. That’s why former CEO Carlos Ghosn did whatever it took to lower them. And, to be fair, it worked—but then, as Donut Media explained, Nissan went overboard.

Key engine components were made from flimsy plastic. Transmissions failed just as the warranty expired. And as these cheap parts degraded, so did Nissan’s reputation.

What made it a performance icon

2019 Nissan 370Z Heritage Edition
2019 Nissan 370Z Heritage Edition | Nissan

Two of Nissan’s most iconic cars were the Skyline GT-R and the Z.

The Skyline GT-R, especially the R34 of the late 90s-early 00s, is perhaps the quintessential ‘forbidden fruit’ vehicle. And the current R35 GT-R, the first one ever officially sold in the US, continues to spread the nameplate’s notoriety. Today, turbocharged engines linked to dual-clutch transmissions and AWD, with tuning at the Nurburgring, are practically a requirement for supercars. In 2009, when the R35 first debuted? It was mind-blowing. Even now, it’s 0-60 time of 2.8 seconds with launch control feels like “a punch to the face,” according to Throttle House.

1987 Nissan Patrol Paris-Dakar rally SUV
1987 Nissan Patrol Paris-Dakar rally SUV | Nissan

There’s also the Patrol, an SUV that competed with Toyota’s Land Cruiser and Mitsubishi’s Montero/Pajero. It became the first diesel to finish in the Top 10 of the Paris-Dakar Rally in 1981. And the later fifth-gen Patrol’s engine was so well-built, tuners have been able to boost it to 1000+ hp. The US did eventually get a Patrol, in the form of the Infiniti QX60 and Nissan Armada. However, these were more about luxury and de-contented when it came to off-road features. And, like the Z and GT-R, they’ve also not really seen major refreshes in a while.

2019 Nissan GT-R
2019 Nissan GT-R | Nissan

The GT-R, while it has been updated somewhat over the years, is now a decade old. And the 370Z is even older. There are rumors of a completely refreshed model, with a twin-turbo V6, and The Drive reports Nissan dealers have been shown completed concept sketches. But that doesn’t change the fact that even 11 years after its debut, the 370Z doesn’t even have a modern infotainment system.

Nissan needs new and reliable platforms, not just technology

2020 Toyota 4Runner TRD Pro
2020 Toyota 4Runner TRD Pro | Toyota

It may seem odd to criticize Nissan for having old platforms when Toyota arguably does the same. Part of the Nissan Frontier’s appeal, for example, is that it’s an old-school, stripped-down pickup truck. That’s the same reason why Toyota’s 4Runner and Tacoma are so popular—and the 4Runner’s platform debuted in 2009. And in a recent Motor Trend comparison, the Nissan Armada beat out the Toyota Sequoia, which hasn’t seen a platform refresh since 2007. What gives?

2020 Toyota Sequoia Platinum
2020 Toyota Sequoia Platinum | Toyota

The difference lies in reliability. The Toyota Sequoia may be old, but it’s one of the most reliable third-row SUVs. Same thing with the 4Runner and Tacoma—they’re old, but Toyota’s been making them so long, it’s ironed-out the glitches. And Toyota has actually added modern safety features and improved infotainment systems.

2019 Nissan Pathfinder
2019 Nissan Pathfinder | Nissan

Nissan, however, hasn’t done the same. Not only was the Frontier’s timing chain the subject of a class-action lawsuit, past models have had their radiators rupture and kill the transmission. Even brand-new Pathfinders have had A/C and backup camera issues, not to mention transmission woes.  The Armada may be luxurious, but that’s worked against it, with critics and consumers calling its interior dated.

2020 Toyota Tacoma interior
2020 Toyota Tacoma interior | Toyota

The Toyota 4Runner and Tacoma are marketed as rugged off-roaders, which means consumers forgive and/or buy into the chunky, somewhat plasticky interiors. That’s not the case with something like the Armada.

In their meeting with Uchida, the dealers stressed that Nissan cannot focus its marketing solely on technology. Yes, consumers do pay attention to safety features and infotainment options like Apple CarPlay. But you can’t drive a smartphone. Adaptive cruise control doesn’t matter if the seats are so uncomfortable, no one will sit in them long enough to use it.

Can Nissan become competitive again?

Nissan New CEO Press Conference
YOKOHAMA, JAPAN – DECEMBER 02: Nissan Motor Co. Chief executive officer Makoto Uchida speaks during a press conference on December 2, 2019 in Yokohama, Japan. (Photo by Tomohiro Ohsumi/Getty Images)

These next few months will be crucial for Nissan. Both in the US, and abroad, the company is floundering. But there is some hope: the Frontier is about to receive a massive update, for example. The company also plans on replacing 70% of its vehicles with new versions by the end of 2021.

In the dealer meeting, Automotive News reported that Uchida took copious notes. According to one dealer, “Uchida is humble and very interested in everybody’s opinion. It’s not ‘his way or the highway,’ which was Carlos Ghosn’s mentality.”

In the end, we’ll just have to keep watching to see how Nissan will fare.

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