Nissan Has Some Big Changes Happening

Industry News / Comments

Some tough decisions will have to be made.

Although it's in no danger of shutting its doors, Japanese automaker Nissan is currently experiencing some financial problems. Earlier this week, it released its quarterly figures and they showed a 70 percent drop in profits. Its 11-year forecast, noted by Reuters, has been cut to an 11-year low. A combination of factors has led to this, specifically a strong Japanese yen and falling sales. The arrest and upcoming trial of former chairman and CEO Carlos Ghosn hasn't helped things, either. Nissan's global shares are also down by 19 percent year. In the US, sales have dropped by 4.5 percent while in China, its largest market, they're down by 2.5 percent.

"Our sales in China outpaced the market, but sales in other key regions, including the US, Europe, and Japan underperformed," said Stephen Ma, Nissan's upcoming new chief financial officer. Nissan is set to receive an entirely new executive team, including Ma, beginning December 1.

2017-2019 Nissan GT-R Front View Driving Nissan
2017-2019 Nissan GT-R Rear View Driving Nissan

Another reason why Nissan is finding itself in some trouble is due to its heavy discounting and fleet sales, a common practice in the US. While this method works to quickly boost sales figures, in the long run, it actually cheapens the brand by lowering vehicle resale value and hurting profits. The fact that Nissan's US lineup is aging isn't helping.

The Frontier mid-size pickup truck dates back to 2004 (a replacement is due soon), and the Altima, Maxima, and Murano crossover all ride on an aging platform. The GT-R and 370Z were launched in 2007 and 2009, respectively. Nissan's best-seller in the US continues to be the Rogue crossover, but it's not good for an entire brand to rely upon strong sales of one model.

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2019-2020 Nissan Altima Front Angle View Nissan
2019-2020 Nissan Maxima Side View Nissan
Front Angle View Nissan

Fortunately, Nissan is about to implement a global recovery plan that will see workforce and global vehicle production costs significantly cut through 2023. It's still too early to know which models will survive, or whether Nissan will take a crossover and truck-only approach similar to Ford. Earlier this month, we got our first indicator of a next-generation Z car, so it's probably safe to assume that sports car is safe. But other slow sellers, such as the Maxima, could be living on borrowed time.

2017-2020 Nissan Rogue Front Angle View Nissan
2017-2020 Nissan Rogue Rear Angle View Nissan

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