Nissan Is Making A Miraculous Recovery In America

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Nissan's recovery strategy is paying off in the US.

Nissan was in a dire situation a few years ago. After former CEO Carlos Ghosn was arrested for fraud, the Japanese automaker reported a $400 million operating loss in 2019. As part of its recovery strategy, Chief Operations Officer Ashwani Gupta was put in charge of reviving Nissan in the North American market. While Nissan is focusing on increasing model revenues in the US, operations were scaled back in Europe to reduce costs. Fortunately for Nissan, this strategy is paying off.

"Each and every indicator that impacts pricing is heading in the right direction," Gupta told Automotive News. "The culture change from volume to value, from push to pull, is working." In the last fiscal year ending March 31, incentives per vehicle were down 4.6 percent in the US, while revenue was up 3.8 percent.

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Certain model trims are also being sold close to the list price. Gupta refers to this strategy as "Quality of Sales," as the COO wants to get more revenue from each vehicle sold to sustain profitability. "We want to pursue 'Quality of Sales' to increase our net revenue per unit," said Gupta. "And the way we can increase revenue per unit is to have pricing which customers are willing to pay, recognizing the content, the performance, the feature value and the non-feature value in the car."

Helping Nissan's road to recovery in the US is a product onslaught of six new or redesigned models arriving in US dealerships by the end of 2021, including all-new versions of the Sentra sedan, Titan pickup, and Rogue crossover. The all-new Nissan Rogue has been particularly successful, with sales up by 43 percent in the last financial quarter compared to Q3.

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Transaction prices are also up by 18 percent and revenue per vehicle is 21 percent higher year-on-year. The new Sentra has enjoyed similar success, with sales up by 50 percent in the last financial quarter over Q3, while transaction prices increased by 15 percent and revenue per vehicle is up 10 percent year over year.

Nissan's US product onslaught will continue with the all-new 2022 Nissan Frontier going on sale this summer. Next year, the production version of the Nissan Z Proto will also help increase the brand's US appeal. Due to emissions regulations, the new Nissan Z car won't be sold in Europe. Despite the challenges the automaker has faced by the pandemic and semiconductor chip shortage, Nissan's future in America is finaly looking bright, as the automaker's overall sales in the US were up by 15 percent in the last financial quarter.

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