Losing Steam: Nissan's six-year upswing shows signs of slowing

[CADILLACSIXTEEN]

Losing Steam
Nissan's six-year upswing shows signs of slowing




NASHVILLE -- Suddenly, Carlos Ghosn's six-year winning streak is looking shaky.

Last year he successfully concluded an ambitious three-year plan to add 1 million sales globally and post operating profits equal to 8 percent of global revenues.

But in May, U.S. sales fell 7.3 percent for Nissan North America Inc., including an 11.7 percent drop at Infiniti Division.

The company has scheduled six extra days of production shutdown at its two big U.S. factories, in Smyrna, Tenn., and Canton, Miss., to prevent inventories from bloating. This month, the Japanese home office also trimmed daily production at two factories there, one of which assembles the Infiniti G35, M45 and Q45 for North America.

Nowadays, Nissan looks more like a cyclical Western company than the quintessential Japanese corporation, Toyota Motor Corp., which reveres relentless, incremental growth.

To complicate things, Nissan has had to halt the global sale of some 2006 four-cylinder Altimas and Sentra SE-Rs built from January through mid-May of this year because of evidence of engine fires.

Ghosn, who began crafting Nissan's revival in 1999, brushed aside criticism that the company was in a slump.

"You can't judge Nissan's long-term strategy by a three- or six-month period," he said of the current situation. "You have to look at five or six years."

Speaking to reporters in Nashville this month as he broke ground for a Nissan headquarters building, Ghosn said that Nissan expected only stable U.S. sales in the first half of 2006. The second half, he said, will see a stream of new sales.

"As for sales being down," Ghosn said, "look at the product plan." During the rest of this year, Nissan says it will launch nine new or redesigned vehicles worldwide.

In the next six months, Nissan's U.S. retailers will receive a redesigned Sentra and Altima. They also will get an Altima hybrid, the new Versa small car from Mexico and the re-engineered Quest minivan. Those products alone should represent half of the brand's annual U.S. sales volume next year.

But until then, Nissan's new management team will have its hands full. On July 1, a slate of new senior managers will begin taking control in Nashville as the company relocates its offices from Gardena, Calif.

Ghosn ordered the move to Nashville to save money. But only 42 percent of the 1,300 staffers decided to move, causing considerable disruption.

Among them: Brad Bradshaw, senior vice president for North American sales and marketing; Bill Bosley, vice president and general manager for Nissan Division; and Larry Dominique, vice president of product development.

In addition to launching the new products, they must deal with a few other models that have slipped this year. Nissan's foray into large trucks, another leg in Ghosn's revival of the company, has been bedeviled by falling market demand for vehicles with big engines.

Sales of the full-sized Titan pickup were off 23.2 percent in May compared with May 2005, and the full-sized Armada SUV is down by 30.2 percent. June began with 100-day supplies of both trucks.

Worse elsewhere

Other auto brands are facing worse concerns. While Nissan Division sales are down by a modest 1.8 percent this year, Chevrolet is down by 8.7 percent and Mitsubishi by 12.3 percent. Ford Motor Co., whose F-series trucks are the target for the Titan and a newly designed Toyota Tundra due out this fall, has a 104-day supply of those trucks. The Chrysler group is sitting on a 125-day supply of its Dodge Ram pickup.

In the same vein, Nissan's U.S. challenges are milder than those in its home market. Nissan's Japanese sales plunged 18.5 percent in April. Ghosn's COO in Japan, Toshiyuki Shiga, said earlier this month that the sales dip was a "backlash" from last year's sales push.

"We totally expected a backlash, but the decline exceeded our expectations," he said.

Asked whether Nissan's targets under the 180 plan, which ended March 31, 2005, might have pulled ahead U.S. sales from the current year, Ghosn gave an adamant "no."

"We added 1 million sales," while maintaining excellent profit margins, he said, referring to the target of his 180 plan. "We didn't give away any sales."

Source:
http://www.autoweek.com/apps/pbcs.dl...024/LATESTNEWS

[megeebee]

Nissan's hot streak loses steam


Lindsay Chappell | |

Automotive News | 6:00 am, June 26, 2006




NASHVILLE -- Suddenly, Carlos Ghosn's six-year winning streak is looking shaky.

Last year he successfully concluded an ambitious three-year plan to add 1 million sales globally and post operating profits equal to 8 percent of global revenues.

But in May, U.S. sales fell 7.3 percent for Nissan North America Inc., including an 11.7 percent drop at Infiniti Division.

The company has scheduled six extra days of production shutdown at its two big U.S. factories, in Smyrna, Tenn., and Canton, Miss., to prevent inventories from bloating. This month, the Japanese home office also trimmed daily production at two factories there, one of which assembles the Infiniti G35, M45 and Q45 for North America.

Nowadays, Nissan looks more like a cyclical Western company than the quintessential Japanese corporation, Toyota Motor Corp., which reveres relentless, incremental growth.

To complicate things, Nissan has had to halt the global sale of some 2006 four-cylinder Altimas and Sentra SE-Rs built from January through mid-May of this year because of evidence of engine fires.

Ghosn, who began crafting Nissan's revival in 1999, brushed aside criticism that the company was in a slump.

"You can't judge Nissan's long-term strategy by a three- or six-month period," he said of the current situation. "You have to look at five or six years."

Speaking to reporters in Nashville this month as he broke ground for a Nissan headquarters building, Ghosn said that Nissan expected only stable U.S. sales in the first half of 2006. The second half, he said, will see a stream of new sales.

"As for sales being down," Ghosn said, "look at the product plan." During the rest of this year, Nissan says it will launch nine new or redesigned vehicles worldwide.

In the pipeline

In the next six months, Nissan's U.S. retailers will receive a redesigned Sentra and Altima. They also will get an Altima hybrid, the new Versa small car from Mexico and the re-engineered Quest minivan. Those products alone should represent half of the brand's annual U.S. sales volume next year.

But until then, Nissan's new management team will have its hands full. On July 1, a slate of new senior managers will begin taking control in Nashville as the company relocates its offices from Gardena, Calif.

Ghosn ordered the move to Nashville to save money. But only 42 percent of the 1,300 staffers decided to move, causing considerable disruption.

Among them: Brad Bradshaw, senior vice president for North American sales and marketing; Bill Bosley, vice president and general manager for Nissan Division; and Larry Dominique, vice president of product development.

In addition to launching the new products, they must deal with a few other models that have slipped this year. Nissan's foray into large trucks, another leg in Ghosn's revival of the company, has been bedeviled by falling market demand for vehicles with big engines.

Sales of the full-sized Titan pickup were off 23.2 percent in May compared with May 2005, and the full-sized Armada SUV is down by 30.2 percent. June began with 100-day supplies of both trucks.

Worse elsewhere

Other auto brands are facing worse concerns. While Nissan Division sales are down by a modest 1.8 percent this year, Chevrolet is down by 8.7 percent and Mitsubishi by 12.3 percent. Ford Motor Co., whose F-series trucks are the target for the Titan and a newly designed Toyota Tundra due out this fall, has a 104-day supply of those trucks. The Chrysler group is sitting on a 125-day supply of its Dodge Ram pickup.

In the same vein, Nissan's U.S. challenges are milder than those in its home market. Nissan's Japanese sales plunged 18.5 percent in April. Ghosn's COO in Japan, Toshiyuki Shiga, said earlier this month that the sales dip was a "backlash" from last year's sales push.



www.autonews.com

[wtgkb8]

Not too surprising...especially since Nissan's Flagship Maxima's redesign for 2007. HP and TQ are down to 255hp/252tq from 265hp/255tq and a lower redline for that VQ (was 6600rpm...now like 6400 or 6300rpm). That, and only evidence of a CVT as the sole transmission w/ no 6 spd manual or manumatic transmission available will keep me from considering another Maxima.

I had actually thought of a Maxima for when I get a new car next summer...but I guess it will have to be only an 2006 if I consider one. The new front end has turned me off as well...you can just tell something is missing...same as the Quest. All they did was remove the plastic chome 'tooth', but basically left the grill with no redesign. Right now l am considering many GMs such as the Aura, G6, Impala, and Grandprix.

[paul8488]

In a couple other thread we talked about how there are few exciting cars... I'd say Nissan has some of the most interesting designs out there, and look where they are. I think as people we're just becoming dull.

[griswold44]

Nissan should regain momentum with those redesigned products.

[Quickening]

They MIGHt regain momentum with their new products. People saw Nissan as new, exciting, edgy/bold cars, their next wave of cars are only slight tweaks to cars already out no the market. If anything they seem less edgy and more refined. Might not be a good thing for Nissan..

[Old Dood]

Originally Posted by paul8488

In a couple other thread we talked about how there are few exciting cars... I'd say Nissan has some of the most interesting designs out there, and look where they are. I think as people we're just becoming dull.

We need NAPS! Trust me after a NAP things are exciting again...hehe

We are going on vacation next week...we rent a cottage on Lake Huron...I love it...I get two whole NAPS a day.

As for the Nissan's They still look "edgy" as you all say.

[asim]

Yeah they have been cooling down this whole year. I'm not worrying though since these models are pretty old, but they still sell pretty good. Wait until the new models show up, then they will do better again.

[Joe in T.O.]

The Maxima is one of the ugliest cars on the road today. The Altima is much better. Here in Canada, the dealers have stopped selling Sentras because rental agencies are reporting abnormally high oil consumption. It just goes to show Japanese cars are no better than domestics.

[RWD60]

"In the next six months, Nissan's U.S. retailers will receive a redesigned Sentra and Altima. They also will get an Altima hybrid, the new Versa small car from Mexico and the re-engineered Quest minivan. Those products alone should represent half of the brand's annual U.S. sales volume next year."

in the next 6 months, about half their lineup (by volume) will be redesigned, including the altima which is 25% all by itself... lets at least see how the new models (with more power, better economy, nicer interiors, and more features than the current ones) do before declaring nissan to be in trouble, much less dead.

[mbukukanyau]

Funny, How F150 is not threatened by the Silvarado but somehow Tundra is going to Floor it

[Michael_S]

Originally Posted by wtgkb8

Not too surprising...especially since Nissan's Flagship Maxima's redesign for 2007. HP and TQ are down to 255hp/252tq from 265hp/255tq and a lower redline for that VQ (was 6600rpm...now like 6400 or 6300rpm). That, and only evidence of a CVT as the sole transmission w/ no 6 spd manual or manumatic transmission available will keep me from considering another Maxima.

Well, remember that the previous horsepower figures were rated under the older measurement standard. The new Society of Automotive Engineers (SAE) standard is more strict, and most automakers (but not GM, thankfully) have seen their numbers go down under the new ratings. The Toyota Avalon went from 280 to 268 horsepower, for example. It's possible the Maxima's engine is basically unchanged and they just put a lower redline on it because of some odd problem with the CVT.

Note: Brick Tamland argued below that I was inaccurate with the my assertion that Nissan's car lineup is old, and provided a good list of factual evidence. I have decided to delete the offending paragraph.

[BrickTamland]

Originally Posted by Michael_S

Aside from their SUVs, Nissan hasn't done a substantial update of their lineup since 2003 or so. It's no wonder they're losing ground.

I vehemently disagree. Nissan's lineup is among the newest in the industry. Over the past few years, they have released a barrage of new products. The last holdout of the "old" Nissan, the Sentra, finally gets its redesign. Let's take a look:
2002: Altima
2003: Murano, 350Z
2004: 350Z Convertible, Maxima, Quest, Titan, Armada
2005: Frontier, Xterra, Pathfinder
2006: Took the year off
2007: Altima, Sentra, Versa

Their lineup is as current as Toyota or Honda.

[Michael_S]

Originally Posted by BrickTamland

I vehemently disagree. Nissan's lineup is among the newest in the industry. Over the past few years, they have released a barrage of new products. The last holdout of the "old" Nissan, the Sentra, finally gets its redesign. Let's take a look:
2002: Altima
2003: Murano, 350Z
2004: 350Z Convertible, Maxima, Quest, Titan, Armada
2005: Frontier, Xterra, Pathfinder
2006: Took the year off
2007: Altima, Sentra, Versa

Their lineup is as current as Toyota or Honda.

Funny, my perspective was totally off. The Sentra and Altima were old, and that somehow led to an impression that the whole lineup is behind the times.

Sorry for the misinformation.

[BrickTamland]

^
|
It's cool, considering how long the Sentra has been around, that could throw someone off. I am surprised they waited so long to redesign the Sentra, especially since it is a bread-and-butter model that does not score highly on customer satisfaction surveys.