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Aug13

Bucking the Trend, Nissan Insists It’s Still Committed to Small Cars

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While public interest in crossovers has encouraged Nissan to rejigger its global offerings, the automaker has refused to abandon small sedans. It’s something we’ve seen across the board with Japanese automakers. As the crossover craze hit full swing, both Toyota and Honda said that abandoning entry-level automobiles might mean leaving first-time buyers behind. Despite crossovers bringing in more customers and money, small sedans and hatchbacks have a tendency to reel in new, young customers. Japanese brands sees the prospect of gaining life-long patrons as an advantage, especially as other automakers (*ahem, the Detroit Three*) shift away from such vehicles.

Nissan’s situation is more complicated. It can’t ignore its bottom line after last months’s dismal financial report, and rumors abound that it will soon begin to pair down its lineup. However, that will not involve culling its small-car offerings. 

According to Automotive News, the brand’s logic is the same as what’s accepted by Toyota and Honda. Nissan sees the likes of the Versa and Sentra as useful tools in capturing new customers and says it has no plans to discontinue either.

“We still see in these segments 5 million car sales a year,” explained Scott Shirley, Nissan’s vice president of marketing operations. “We are redoubling our forecast; we are concentrating on delivering much better value, much stronger product to the market and a much better ownership experience.”

From Automotive News:

Nissan executives contend lower-cost small cars remain relevant, especially for price-conscious first-time car buyers. They point to Nissan-commissioned research that shows 78 percent of American drivers who don’t own a sedan will consider buying one soon. Meanwhile, 86 percent of buyers between ages 18 and 34 who don’t own a sedan will consider buying one soon, according to the research.

The target customer for Nissan’s compact cars “is far more aligned with sedans,” Shirley said.

With Ford and other U.S. auto brands cutting their losses and exiting the sedan market, Nissan sees an opportunity to grab a larger slice of the shrinking pie. The Sentra and Versa combined to account for 13.4 percent of the U.S. small-car market last year, up from 10.9 percent five years ago.

The majority of that has gone to the Sentra, however. Domestic Versa deliveries declined from 144,528 units in 2015 to just 75,809 in 2018. By contrast, the Sentra saw a modest uptick in sales; Nissan has consistently moved over 200,000 annual units in the U.S. since 2015.

Nissan expects lower volumes for 2019; however, that will be due partially to its decision to move away from fleet sales. Rather than perpetually hunting down volume, the brand’s previous modus operandi, Nissan hopes to improve its retail margins without leaning on heavy incentives. A challenge, but one Shirley claimed the manufacturer is up for.

“We expect that we can grow the retail sales volume,” he said. “We also recognize that there is a profitable, rational level of fleet that can be done as well.”

Nissan’s plan hinges on sprucing up fleet models with more content. While it likely won’t occur overnight, Nissan has already updated the Versa to that effect. The same can be expected for the Sentra before year’s end — resulting in a better-equipped car with a new look and revised powertrain for 2020. The trick will be finding balance. Nissan can’t abandon fleet sales outright, nor can it assume consumers will immediately sweep up its improved compact and sedan offerings, but it might be able to chisel out a place for itself as other companies focus primarily on crossover vehicles.

[Images: Nissan]

– Bucking the Trend, Nissan Insists It’s Still Committed to Small Cars –

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