Posted on 10/06/2024 2:17:34 PM PDT by george76
Nissan’s sales are plunging in critical markets, putting their profit forecasts in jeopardy. Can the struggling automaker find a way back to profitability?
Nissan is facing one of its toughest financial challenges in recent history.
Late last week, the Japanese automaker reported dismal global sales figures, raising concerns that it may fall short of its fiscal year profit forecast, which the company already lowered back in July due to poor sales. Operating profit plunged by 99% last quarter, and sales dropped 5.5% in August, marking the company’s fifth consecutive month of decline...
The picture became even more grim on Tuesday after Nissan announced its third-quarter U.S. sales, down 2.2% year over year. With major markets like the U.S. and China performing poorly, Nissan’s future looks precarious. The question on everyone’s mind is whether they can turn things around.
A losing battle in China..
One of Nissan’s biggest hurdles lies in its two largest markets: the United States and China. Together, these regions account for nearly half of the automaker’s global sales volume, and both are underperforming in different ways.
In China, Nissan’s sales slumped 24% in August. This decline was partly expected, as the company had already begun closing a plant and cutting production capacity after years of weak performance. Local competitors like BYD have taken the lead in the electric vehicle (EV) race, offering models loaded with the high-tech features Chinese consumers demand. Nissan, meanwhile, has struggled to keep up.
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Behind the curb in the United States..
The situation in the U.S. is different but equally challenging. While Chinese vehicles aren't a significant factor due to tariffs, Nissan still needs to capitalize on the growing demand for hybrids as quickly as competitors like Hyundai and Kia. Nissan doesn't offer hybrid models in a market where gas-electric vehicles are increasingly popular.
Many of Nissan's models are dated, some haven’t seen an update in nearly 5 years. While Nissan has recently introduced a new Kicks and Armada, the rest of their lineup shows its age. At the same time, competition from the likes of Ford, Chevy, Honda, Hyundai, and KIA have all recently introduced freshly updated vehicles at similar price points.
In August, U.S. sales slipped by 0.1% — a far more modest retraction than the one the company saw in China, but a point of concern nonetheless as the first monthly decline since April. That’s concerning, especially as other automakers are seeing steady growth in the EV and hybrid segments.
While Nissan saw a 2.2% decline in third-quarter U.S. sales. Hyundai reported a 5% increase in U.S. sales in that same time. Hyundai attributes the success to strong hybrid sales, which saw a 36% year-over-year jump in September.
Dealer struggles and excess inventory..
Nissan’s difficulties are hitting its dealerships hard. U.S. dealers have seen their profits fall by a staggering 70% over the past year. Despite increased spending on advertising and incentives, many Nissan dealers are struggling to move 2023 models off their lots.
James Hong, an analyst at Macquarie Securities Korea, told Bloomberg that he believes Nissan will need to either introduce new models or slash prices to clear its inventory. However, the recent launches of the Infiniti QX80 SUV and Nissan Kicks crossover won’t be enough. These lower-volume models will do little to address the stockpile of unsold cars.
Meanwhile, the company’s top-selling electric vehicle, the Ariya, is not eligible for the $7,500 federal tax credit in the U.S. because it’s manufactured in Japan. While Nissan has found some success with low-cost lease deals, the Ariya remains a tough sell in a market flooded with EV options.
A grim financial picture..
The financial outlook for Nissan is troubling. The automaker’s operating profit for the last quarter plummeted by 99%, leading to a trimming of its full-year outlook. Nissan now expects to bring in ¥500 billion ($3.5 billion) by the end of the fiscal year, a 12% reduction from previous estimates. The company also slashed its full-year sales target to 3.65 million units.
These numbers haven’t inspired confidence in investors. Nissan’s stock has dropped 27% this year. With more bad news potentially on the horizon, Nissan’s upcoming quarterly earnings report in November will be closely watched. If sales in the U.S. and China don’t improve, Nissan could be in for another rough quarter.
A path to recovery?
Despite the grim outlook, Nissan has a plan to revive its fortunes. The automaker has pledged to launch seven new hybrid and electric models in the U.S. by 2028, a move that could help it compete in a rapidly changing market. But is this enough to turn things around?
One of Nissan’s biggest challenges will be convincing consumers to wait for its new lineup of hybrids and EVs, rather than opting for the many alternatives already available. Companies like Toyota and Ford are pushing forward with innovative hybrid models, while Tesla and Rivian continue to dominate the EV market. With such stiff competition, Nissan’s timeline for releasing new models may be too little, too late.
What’s next for Nissan?
Nissan’s future is uncertain, but the company isn’t out of options. To avoid falling off the financial cliff, Nissan will need to aggressively push its new hybrid and electric models, streamline its production capacity, and continue offering attractive incentives to move current inventory. It will also need to win back consumer trust by offering vehicles that are competitive in both price, technology and style.
The road ahead won’t be easy, but Nissan’s survival may depend on its ability to make quick, decisive moves in an industry that’s changing faster than ever. The next few quarters will be crucial. Investors, dealers, and consumers alike will be watching closely to see if Nissan can turn things around before it’s too late.
Anyone here read the book “The Reckoning?” Long read. He couda picked Toyota but he picked Nissan. The book told usb about our screwups.
Despite the grim outlook, Nissan has a plan to revive its fortunes. The automaker has pledged to launch seven new hybrid and electric models in the U.S. by 2028,
I have had 3 Nissan vehicles. All of them got well over 100K miles and I never had any problems with them whatsoever.
Yeah, they've had a reputation for being a ghetto cruiser for quite some time around me.
The automaker has pledged to launch seven new hybrid and electric models in the U.S. by 2028, a move that will KILL the company.
A lot of the auto industry’s problems stem from foolishly jumping on the EV bandwagon. Showing about as much analytic ability as a brain washed middle school child they uncritically bought into the climate change myth currently being propagated by governments to excuse tyrannical reduction sin standard of living (for the hoi poli, not the government apparatchicks)
I wouldn’t bet the farm on that.
Most kids today don’t know a wrench from a screw driver.
And most of them can’t pull there eyes off their phone to talk on it.
I drive a 2018 Nissan Murano that we bought from Hertz in 2019 with 43,000 miles on it. It’s approaching 75,000 miles and I’ve only had to do routine maintenance on it and change the battery once. I’m very happy with it and hope to keep it until it dies. Hubby drives a 2008 Toyota Corolla with 210,000 miles on it, also with no problems. We’ve had lemons in the past so we appreciate what we’ve got.
Had a 2000 Frontier, mechanically reliable but cheap interior. Got a 2006 Frontier Nismo which was good until it hit 150K when the transmission went out. Got it going, but it was all downhill after that. Got rid of it for a 2013 Tacoma that still feels like a new truck everytime I drive it.
Valid point.
But if it was that basic, it wouldn’t cost one’s first born to get service done.
And, I learned basic maintenance though my natural mechanical skills are lacking. Necessity is the mother of invention.
Eight speed transmissions to achieve 1/10 of a mile per gallon improvement (theoretically) and are impossible to service and impractically expensive to replace are what we have come to. For what? Insane leftist fantasies.
They could go for the self-righteous market if Subaru didn’t already have that tied up.
Nissan’s problems go back well over a decade, with the terrible performance of their CVT transmissions. All their cars were blowing transmissions from 2012-2018. They’ve never recovered.
We have a Nissan Altima. Been a decent car with few issues. However like any new car, subject to various recall repairs.
Local dealer will not honor them in any practical way.
“Sure, drop it off”.
When can we get it back?
“Maybe two weeks”
It’s a hood latch tweek!
“We’ll get to when we get to it. Paying customers come first”.
Went through variations of this multiple times.
Nissan customer service wasn’t interested in talking to us.
We won’t be buying another Nissan of any variety.
We are rapidly approaching government imposed Idiocracy.
We have insane innovations imposed indirectly by government regulations.
Besides your example of ridiculously complex automatic transmissions we have the automatic engine stop feature that will reduce the life of your engine by half.
Electric cars that will burst in to flames at the least provocation.
And today I read about a solar powered ferry that take twice as long to make the crossing as the diesel powered ferry it replaced.
I can not believe that human kind can survive long with the leadership we live under today
Either we will have revolution or we will suffer extinction.
Reminds me of old Godzilla movies for some reason.
The 2 most reliable, trouble-free vehicles I’ve ever owned have been Nissans - A Quest minivan back in the 90s and a Rogue that I currently drive. The Quest lasted until almost 200 k miles with nothing other than maintenance - the kids were grown up so we traded it in on a SUV. The Rogue has 142 k on it and still getting me to work every day. The Rogue’s CVT will probably quit on me some day - if it does I may just have a new one dropped in as long as the motor keeps churning.
wow! new electric nissan car models available in four years! they’ll arrive pretty much right after the entire EV fad has completely imploded in the U.S. ...
I am in complete agreement.
“Being seen driving a Nissan now a days screams “poor credit”..
Only thing worse is being seen in a Mitsubishi..”
Good lord, you are shallow, materialistic & judgmental. Glad I’ll never meet you
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