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The U.S. is Nissan’s Problem

(Credit: Nissan)

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The U.S. is Nissan’s Problem

It’s come out that Nissan is in serious financial trouble, and the company has identified the source of many of its problems: the United States. Missteps in this highly competitive market is costing the automaker dearly, and now CEO Hiroto Saikawa says changes are coming.

To be clear, Nissan is not pulling out of the United States. This is the most profitable market for the company, so instead Nissan looks to change how it conducts business in America.

First, Nissan profit margins for the U.S. are razor thin at about 1 to 2 percent. Saikawa said that’s “rock bottom” for the company and has declared those numbers will increase. He also stated that troubles in the U.S. were created by Carlos Ghosn and his disciples, which is why management here is getting cleaned out.

Before, Nissan’s focus in North America was simply capturing 10 percent market share. It hit that number for 2017 by focusing on shopper incentives and fleet sales. Those are the same pitfalls GM fell into, which aren’t great places for any automaker to spend time. As a result, the Nissan brand has been cheapened in the eyes of U.S. consumers. Also, Nissan was making decisions that hurt profit margins.

One adjustment we’ve already seen is fewer shopper incentives. Fleet sales are being reduced. It also cut back production in Canton, Miss. Next up are complete overhauls on several popular models, like the upcoming next-generation Frontier pickup truck and the Rogue crossover.

Source: Bloomberg 

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