Is Nissan's Big Marketing Push Coming Too Late?

Part of the package, according to Automotive News, is new incentives to get leftover 2019s off the lot. Dealers will also get $550-per-vehicle volume bonuses through September (up from $250). A whopping 40 percent of Nissan dealers are currently losing money.

"The increase in marketing spend is much needed," Jessica Caldwell, insights executive director for Edmunds.com, told MediaVillage. "Sales have been sluggish for Nissan and, with new products like Sentra and refreshed Titan, they need to drive consumer interest in their products."

The company overall is not doing well, and recently cut its full-year operating profit forecast by 43 percent. Internationally, sales were down 11 percent in the October–December 2019 period. In the U.S., sales were down 8.7 percent in 2019 — against an industry average of a 1.2 percent decline. Infiniti sales are down, too. The company's U.S. division sold 18,065 cars in December 2018 and 11,243 in December 2019. The bright spot was the best month ever for the big QX80, up 9 percent to 2,580 sold. Americans can't get enough of the full-sized luxurious SUVs.

It would be easy to say that all of Nissan/Infiniti's troubles are due to the firing of hard-charging CEO Carlos Ghosn, but industry analysts and dealers don't necessarily see it that way. Ghosn gets blamed for being overly ambitious and trying to grow the Nissan and Infiniti brands too quickly. Growth at any cost meant that dealers strained to meet goals and sold cars cheaply at the end of each month, irritating consumers who paid more for them.

So, Ghosn deserves some of the blame. But focusing on him has perhaps gone on too long, and the dispute continues to roil the company.

Ghosn wanted Nissan to have an 8 percent share of the global market by 2019. Instead, the share actually shrank from the 5.8 percent the company had in 2011. Now it's 5.5 percent, behind VW, Ford, and Honda. That's not good!

Is it the cars? Yes and no. The company hasn't had a lot of exciting new products to announce. But it's doing some things right. Infiniti placed third on J.D. Power's 2019 U.S. Sales Satisfaction Index for luxury cars, after Porsche (the leader) and Mercedes-Benz. Chris Sutton, vice president of automotive retail at J.D. Power, told Media Village that Infiniti is "good on using technology to sell cars," an approach that includes putting tablets in the hands of the sales staff. (Verizon is big on that, too.)

Nissan didn't do so badly, either, placing eighth of 20 on the Power list among mass-market brands. "I would argue that both Nissan and Infiniti performed relatively well," Sutton said. In 2013, the brand was in 10th place, which means it's moved up, but not a great deal.

If consumers have a good experience with a brand, they'll stick with it. That is, unless they're seduced away by something newer, shinier, and with more tech. And that's where the new models come in. The all-new 2020 Sentra is being billed as a technology tour de force, but a lot of it — Apple CarPlay and compatibility, USB-C ports, streaming audio via Bluetooth, plus various safety packages — is on most new cars. Oddly enough, a promotional photo for the Sentra shows a family with all of their phones plugged in. What, no Bluetooth?

The new 2020 Titan is welcome in the truck-loving marketplace, but it offers only one powertrain — a 5.6-liter, 400-horsepower V-8, coupled to a nine-speed automatic — when the American rivals offer a whole smorgasbord of choices. Towing ability is less than stellar.

When asked what type of increase in marketing spend (aside from dealer incentives) Nissan is planning, its public relations team said the company doesn't have any details it can share at this time.

In the meantime, Nissan's dealers are restive; I'm sure they welcomed the February 13 announcement. But they want more, including cars and, especially, trucks that consumers can get excited about. Here's the problem distilled, from The New York Times:

"Nissan has also failed to develop vehicles that appeal to the changing tastes of American consumers, who are more interested in trucks and sport utility vehicles than Nissan's staid sedans. And while the company has sought to address those problems, its upper ranks have spent much of the last year consumed with battles to fill the power vacuum created by Mr. Ghosn's ouster."

Time to focus, Nissan.

Photo credit: Nissan

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.