Can Nissan Really Beat General Motors And Volkswagen In China?

GM

Based on its 2017 sales, we like Nissan's chances.

Nissan had a red hot sales year in 2017 thanks to its popular crossover models like the Rogue and Rogue Sport. Thanks to the company's ties with Renault and Mitsubishi, Nissan has been able to become a global powerhouse. Nissan isn't ready to stop there, because Automotive News reports that the Japanese automaker plans to invest 60 billion yuan ($9.5 billion) in China over the next five years. This investment will help Nissan reach its goal of being one of the top three automakers in the world's biggest car market.

Like other companies that operate in China, Nissan has a joint-venture partner to help it navigate the market. Nissan and the Dongfeng Group have only been a minor player in China up to this point. The Japanese automaker plans to increase its yearly Chinese sales to 2.6 million vehicles by 2022, up from 1.5 million vehicles last year. Nissan is calling its plan to sell more cars in China the "Triple One" strategy. The strategy focuses on electric vehicles, light commercial trucks and vans, and the Venucia brand, which is a budget brand that Nissan operates in China. These segments are expected to surge in demand in the coming years.

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Nissan hopes that this strategy will help it compete against the two dominant automakers in the Chinese market, GM and Volkswagen (each of which sold 4 million cars in China last year). For comparison, Nissan, Toyota, Ford and Honda each only sold around one million cars here last year. “We aim to break away from this second-tier group and become a top-3 China automaker,” Nissan’s China chief Jun Seki said in an interview with Reuters. “We need to go full-throttle aggressive. If we didn’t do that, we would fall behind and fail to grab market share otherwise we could take.”

Infiniti will also be a crucial part of Nissan's growth. The Nissan and Infiniti brands will both add more hybrid models in the next five years. Nissan's Chinese sales will be heavily dependent on the Venucia brand, which uses retired Nissan platforms and transmissions. Last year, Venucia sold 143,000 vehicles, which was up 23 percent from 2016. GM is the only other automaker that has its own low-cost brand for China. Nissan looks to be in a good position to capture the Chinese market, just as it has done with the world market in 2017.

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