Nissan Australia managing director Richard Emery has made some frank assessments of the company’s status here, as he rounds out his first 12 months in the job.
Gone are the outlandish sales projections espoused by recent predecessors, and the days of rampant discounting to clear excess stock are being phased out. It was good for car buyers, but terrible for the brand's health.
Nissan, says Emery, became “part of the also-rans” for a time, and had some ground to claw back. Its image took a beating, even if its sales (too many of which were skinny deals or fleet sales) didn't to the same degree.
As such, Emery, who took the reins at Nissan in April 2014 after serving as the manager of Mercedes-Benz passenger cars in the Australia/Pacific, has led a restructure of the company’s local arm and changed its trajectory.
“I think the way we ran our business in 2011/12/13 created a persona of us being a very retail on-sale brand, and that we lost some of our mojo, we lot some of our standing in the marketplace,” Emery admitted.
“I use the term ‘A’ and ‘B’ team. I think we became part of the also-rans, and I think based on the business we have in Australia and the depth of that business, we deserve to be viewed a little more seriously.
“What we’re trying to achieve in next 12 months is to re-establish ourselves — irrespective of what that means in the volume race — as a serious brand, that’s got a big stake in Australia.”
Few people are aware, but Nissan isn’t just an on-seller here. It has its own financial services, its own factory race team, a booming components factory that exports millions of parts around the globe based in Melbourne, and a team of engineers and testers working on early-build cars.
The key message Emery wants to convey is that this re-positioning doesn’t mean boosting volume per se, though the company is up 20 per cent this year and sits ahead of Ford in fifth place on the sales chars. Volume was never the issue: registering too many cars in the first place, and selling them on low margins (especially high-spec ones) was.
“In fact the status of us in the volume race has not been a priority from me, or Japan for that matter,” Emery said. “Certainly we want to grow market share, improve customer satisfaction and have a happier network. Whether its 70K a year or 80K a year that will depend on market circumstances.”
Regardless, Nissan is putting a final nail in the coffin of the strategies espoused by Emery’s predecessors, American natives Dan Thompson and Bill Peffer. The days of proposing to outsell Mazda and become the top full importer left Nissan with red faces and thousands of excess cars in stock.
This led to rampant discounting, which diluted a well known brand. That was great news for the consumer, but it also hurt the bottom line and resale values of its vehicles. It also dented Nissan’s image.
By force-feeding its dealers more cars than they could sell, it also strained relations with its network. The issues with that are numerous, particularly when they operate on a multi-franchise basis.
“We won’t be driven by pure volume at the cost of everything else,” Emery said. “Profitability, dealer profits, customer satisfaction, resale value… we finance a lot of cars, and all of that discounting we did in 2011/12/13 did hurt us,” he admitted.
“I’ve even mowed the lawn because we don’t park cars on grass anymore,” he joked. ‘Parking cars on grass’ is shorthand for storing excess vehicles at a holding yard as they await allocation.
Nowadays, Nissan operates on having only 30 days stock in the system. It is also adjusting volume targets, and pruning back its rental and fleet deals in some sectors. As well as this, it axed the Almera inside the past year, and is removing a number of spec levels from its range of cars to clear up confusion.
In the past two weeks, it has launched the revised Micra and Juke and has taken the chance to trim back the size of each model range. It tweaked the layout of its underperforming Pulsar range last week too.
Nissan also launches the new Navara in a few weeks time. It replaces the current D22 and D40 versions in one fell swoop.