Losing steam : Nissan's six-year upswing shows signs of slowing
06-26-06, 08:01 AM
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Losing steam : Nissan's six-year upswing shows signs of slowing
By LINDSAY CHAPPELL | AUTOMOTIVE NEWS
AutoWeek | Published 06/26/06, 7:38 am et
NASHVILLE -- Suddenly, Carlos Ghosn's six-year winning streak is looking shaky.
Last year he successfully concluded an ambitious three-year plan to add 1 million sales globally and post operating profits equal to 8 percent of global revenues.
But in May, U.S. sales fell 7.3 percent for Nissan North America Inc., including an 11.7 percent drop at Infiniti Division.
The company has scheduled six extra days of production shutdown at its two big U.S. factories, in Smyrna, Tenn., and Canton, Miss., to prevent inventories from bloating. This month, the Japanese home office also trimmed daily production at two factories there, one of which assembles the Infiniti G35, M45 and Q45 for North America.
Nowadays, Nissan looks more like a cyclical Western company than the quintessential Japanese corporation, Toyota Motor Corp., which reveres relentless, incremental growth.
To complicate things, Nissan has had to halt the global sale of some 2006 four-cylinder Altimas and Sentra SE-Rs built from January through mid-May of this year because of evidence of engine fires.
Ghosn, who began crafting Nissan's revival in 1999, brushed aside criticism that the company was in a slump.
"You can't judge Nissan's long-term strategy by a three- or six-month period," he said of the current situation. "You have to look at five or six years."
Speaking to reporters in Nashville this month as he broke ground for a Nissan headquarters building, Ghosn said that Nissan expected only stable U.S. sales in the first half of 2006. The second half, he said, will see a stream of new sales.
"As for sales being down," Ghosn said, "look at the product plan." During the rest of this year, Nissan says it will launch nine new or redesigned vehicles worldwide.
In the next six months, Nissan's U.S. retailers will receive a redesigned Sentra and Altima. They also will get an Altima hybrid, the new Versa small car from Mexico and the re-engineered Quest minivan. Those products alone should represent half of the brand's annual U.S. sales volume next year.
But until then, Nissan's new management team will have its hands full. On July 1, a slate of new senior managers will begin taking control in Nashville as the company relocates its offices from Gardena, Calif.
Ghosn ordered the move to Nashville to save money. But only 42 percent of the 1,300 staffers decided to move, causing considerable disruption.
Among them: Brad Bradshaw, senior vice president for North American sales and marketing; Bill Bosley, vice president and general manager for Nissan Division; and Larry Dominique, vice president of product development.
In addition to launching the new products, they must deal with a few other models that have slipped this year. Nissan's foray into large trucks, another leg in Ghosn's revival of the company, has been bedeviled by falling market demand for vehicles with big engines.
Sales of the full-sized Titan pickup were off 23.2 percent in May compared with May 2005, and the full-sized Armada SUV is down by 30.2 percent. June began with 100-day supplies of both trucks.
Worse elsewhere
Other auto brands are facing worse concerns. While Nissan Division sales are down by a modest 1.8 percent this year, Chevrolet is down by 8.7 percent and Mitsubishi by 12.3 percent. Ford Motor Co., whose F-series trucks are the target for the Titan and a newly designed Toyota Tundra due out this fall, has a 104-day supply of those trucks. The Chrysler group is sitting on a 125-day supply of its Dodge Ram pickup.
In the same vein, Nissan's U.S. challenges are milder than those in its home market. Nissan's Japanese sales plunged 18.5 percent in April. Ghosn's COO in Japan, Toshiyuki Shiga, said earlier this month that the sales dip was a "backlash" from last year's sales push.
"We totally expected a backlash, but the decline exceeded our expectations," he said.
Asked whether Nissan's targets under the 180 plan, which ended March 31, 2005, might have pulled ahead U.S. sales from the current year, Ghosn gave an adamant "no."
"We added 1 million sales," while maintaining excellent profit margins, he said, referring to the target of his 180 plan. "We didn't give away any sales."
source : http://www.autoweek.com/apps/pbcs.dl...1/businessweek
AutoWeek | Published 06/26/06, 7:38 am et
NASHVILLE -- Suddenly, Carlos Ghosn's six-year winning streak is looking shaky.
Last year he successfully concluded an ambitious three-year plan to add 1 million sales globally and post operating profits equal to 8 percent of global revenues.
But in May, U.S. sales fell 7.3 percent for Nissan North America Inc., including an 11.7 percent drop at Infiniti Division.
The company has scheduled six extra days of production shutdown at its two big U.S. factories, in Smyrna, Tenn., and Canton, Miss., to prevent inventories from bloating. This month, the Japanese home office also trimmed daily production at two factories there, one of which assembles the Infiniti G35, M45 and Q45 for North America.
Nowadays, Nissan looks more like a cyclical Western company than the quintessential Japanese corporation, Toyota Motor Corp., which reveres relentless, incremental growth.
To complicate things, Nissan has had to halt the global sale of some 2006 four-cylinder Altimas and Sentra SE-Rs built from January through mid-May of this year because of evidence of engine fires.
Ghosn, who began crafting Nissan's revival in 1999, brushed aside criticism that the company was in a slump.
"You can't judge Nissan's long-term strategy by a three- or six-month period," he said of the current situation. "You have to look at five or six years."
Speaking to reporters in Nashville this month as he broke ground for a Nissan headquarters building, Ghosn said that Nissan expected only stable U.S. sales in the first half of 2006. The second half, he said, will see a stream of new sales.
"As for sales being down," Ghosn said, "look at the product plan." During the rest of this year, Nissan says it will launch nine new or redesigned vehicles worldwide.
In the next six months, Nissan's U.S. retailers will receive a redesigned Sentra and Altima. They also will get an Altima hybrid, the new Versa small car from Mexico and the re-engineered Quest minivan. Those products alone should represent half of the brand's annual U.S. sales volume next year.
But until then, Nissan's new management team will have its hands full. On July 1, a slate of new senior managers will begin taking control in Nashville as the company relocates its offices from Gardena, Calif.
Ghosn ordered the move to Nashville to save money. But only 42 percent of the 1,300 staffers decided to move, causing considerable disruption.
Among them: Brad Bradshaw, senior vice president for North American sales and marketing; Bill Bosley, vice president and general manager for Nissan Division; and Larry Dominique, vice president of product development.
In addition to launching the new products, they must deal with a few other models that have slipped this year. Nissan's foray into large trucks, another leg in Ghosn's revival of the company, has been bedeviled by falling market demand for vehicles with big engines.
Sales of the full-sized Titan pickup were off 23.2 percent in May compared with May 2005, and the full-sized Armada SUV is down by 30.2 percent. June began with 100-day supplies of both trucks.
Worse elsewhere
Other auto brands are facing worse concerns. While Nissan Division sales are down by a modest 1.8 percent this year, Chevrolet is down by 8.7 percent and Mitsubishi by 12.3 percent. Ford Motor Co., whose F-series trucks are the target for the Titan and a newly designed Toyota Tundra due out this fall, has a 104-day supply of those trucks. The Chrysler group is sitting on a 125-day supply of its Dodge Ram pickup.
In the same vein, Nissan's U.S. challenges are milder than those in its home market. Nissan's Japanese sales plunged 18.5 percent in April. Ghosn's COO in Japan, Toshiyuki Shiga, said earlier this month that the sales dip was a "backlash" from last year's sales push.
"We totally expected a backlash, but the decline exceeded our expectations," he said.
Asked whether Nissan's targets under the 180 plan, which ended March 31, 2005, might have pulled ahead U.S. sales from the current year, Ghosn gave an adamant "no."
"We added 1 million sales," while maintaining excellent profit margins, he said, referring to the target of his 180 plan. "We didn't give away any sales."
source : http://www.autoweek.com/apps/pbcs.dl...1/businessweek
06-26-06, 04:05 PM
#5
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Thing is these are fresh vehicles. The Quest is all new, the Titan is only 2 years old as the Armada/QX56. They are slowing M35/45 production and its a year old. The FX just got refreshed this year and sales are down a bunch.
Add to the fact competiton is just FIERCE right now and I think Nissan has topped out. Ghosen crapped on hybrids and its just a matter of time the word spreads about quality of lack of it.
Next, that move to Tennessee is just going to slow things up, that is a huge move, from one side of the country to the other.
Finally, looking at their new cars, its hard to tell them apart from the current ones. Will consumers jump on that? I think a lot of Nissans success was the models now are a huge difference from anything they had before. Now instead of revolution, they are going with evolution.
I don't even think a new G35 is going to help much. I think the new ALTIMA is what we need to watch.
Funny but as the article stated, some other companies wouldn't mind being in their shoes!
Add to the fact competiton is just FIERCE right now and I think Nissan has topped out. Ghosen crapped on hybrids and its just a matter of time the word spreads about quality of lack of it.
Next, that move to Tennessee is just going to slow things up, that is a huge move, from one side of the country to the other.
Finally, looking at their new cars, its hard to tell them apart from the current ones. Will consumers jump on that? I think a lot of Nissans success was the models now are a huge difference from anything they had before. Now instead of revolution, they are going with evolution.
I don't even think a new G35 is going to help much. I think the new ALTIMA is what we need to watch.
Funny but as the article stated, some other companies wouldn't mind being in their shoes!
06-26-06, 06:37 PM
#6
Speaks French in Russian
Except for Nissan, Japanese automakers on the rise
Four major Japanese automakers today reported their global production rose in May, but the country's second-biggest automaker, Nissan Motor, posted a decline, reports the Associated Press. Nissan said worldwide production fell 11.0 percent as domestic and overseas production declined for the fifth consecutive month. Toyota, Honda, Mazda, and Mitsubishi reported increases of 10.4 percent, 6.8 percent, 19.3 percent, and 4.2 percent, respectively.
Four major Japanese automakers today reported their global production rose in May, but the country's second-biggest automaker, Nissan Motor, posted a decline, reports the Associated Press. Nissan said worldwide production fell 11.0 percent as domestic and overseas production declined for the fifth consecutive month. Toyota, Honda, Mazda, and Mitsubishi reported increases of 10.4 percent, 6.8 percent, 19.3 percent, and 4.2 percent, respectively.
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