Why Is Nissan Cutting Prices?

Derek Kreindler
by Derek Kreindler
why is nissan cutting prices

One of the bigger stories of 2013 has so far managed to escape the news cycle. I’m not exactly sure why Nissan’s announcement of significant reductions on the MSRP of new cars hasn’t gotten more coverage, but I’m also not 100 percent sure of Nissan’s motives either.

The Canadian Press, one of the few outlets to cover the news, does a good job of not burying the lede here

Nissan is cutting prices on seven of its 18 models in the U.S., hoping its cars and trucks will show up in more internet searches by shoppers. The price cuts vary with the amount of equipment on each model. They run from 2.7 per cent, or $580 US, on the top-selling Altima midsize car to 10.7 per cent, or $4,400, on the Armada big SUV. Executives are under pressure to sell more cars, with Nissan’s CEO targeting a 10 per cent U.S. market share within three years.

Nissan is aggressively pursuing their marketshare goal with VW-like fervor; witness the revamp of almost all of their products, which have become even more oriented towards the tastes of American consumers (if such a thing were possible). The Altima, once the original Japanese mid-size muscle sedan, is now just another generic entrant, while the Pathfinder, criticized by armchair off-roads for becoming a crossover, is pretty good at fulfilling its duties as a family hauler that looks like an SUV.

Apparently, Nissan felt that the sticker prices of their cars were too high to be competitive in online car shopping searches. Nissan must want to get in front of consumer eyeballs badly enough to incur the massive pain-in-the-rear that comes with such a move. Since the discounts only apply to cars about to be shipped to dealers (and extended indefinitely), cars currently sitting on dealer lots will get some serious incentives to help dealers move them.

Our industry sources tell us that this will cost Nissan about $100 million, about the same price tag as a new model development program for many manufacturers. This is not a small expenditure, even for a firm as big as Nissan. But it does highlight the importance that many manufacturers are placing on volume, which, in the absence of decent margins, is seen as the way to make money building cars.

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  • Junebug Junebug on May 07, 2013

    My wife and I use to buy a new Nissan every year cause we liked the new car thing and as long as we stayed with Nissan, we kept the same payments. I guess it was like a 1 year lease without the lease. But, try to sell or trade them for anything else, you'll get your feelings hurt!

  • Nzecowitz Nzecowitz on May 07, 2013

    "about $100 million, about the same price tag as a new model development program for many manufacturers" Not sure about this.

  • Make_light I drive a 2015 A4 and had one of these as a loaner once. It was a huge disappointment (and I would have considered purchasing one as my next car--I'm something of a small crossover apologist). The engine sounded insanely coarse and unrefined (to the point that I wasn't sure if it was poor insulation or there was something wrong with my loaner). The seats, interior materials, and NVH were a huge downgrade compared to my dated A4. I get that they are a completely different class of car, but the contrast struck me. The Q3 just didn't feel like a luxury vehicle at all. Friends of mine drive a Tiguan and I can't think of one way in which the Q3 feels worth the extra cost. My mom's CX-5 is better than either in every conceivable way.
  • Arthur Dailey Personally I prefer a 1970s velour interior to the leather interior. And also prefer the instrument panel and steering wheel introduced later in the Mark series to the ones in the photograph. I have never seen a Mark III or IV with a 'centre console'. Was that even an option for the Mark IV? Rather than bucket seats they had the exceptional and sorely missed 60/40 front seating. The most comfortable seats of all for a man of a 'certain size'. In retrospect this may mark the point when Cadillac lost it mojo. Through the early to mid/late 70's Lincoln surpassed Cadillac in 'prestige/pride of place'. Then the 'imports' took over in the 1980s with the rise of the 'yuppies'.
  • Arthur Dailey Really enjoying this series and the author's writing style. My love of PLC's is well known. And my dream stated many times would be to 'resto mod' a Pucci edition Mark IV. I did have a '78 T-Bird, acquired brand new. Preferred the looks of the T-Bird of this generation to the Cougar. Hideaway headlights, the T-Birds roof treatment and grille. Mine had the 400 cid engine. Please what is with the engine displacements listed in the article? I am Canada and still prefer using cubic inches when referencing any domestic vehicles manufactured in the 20th century. As for my T-Bird the engine and transmission were reliable. Not so much some of the other mechanical components. Alternator, starter, carburetor. The vehicle refused to start multiple times, usually during the coldest nights/days or in the most out of the way spots. My friends were sure that it was trying to kill me. Otherwise a really nice, quiet, 'floaty' ride, with easy 'one finger' steering and excellent 60/40 split front seat. One of these with modern mechanicals/components would be a most excellent highway cruiser.
  • FreedMike Maybe they should buy Twitter now.
  • FreedMike A lot of what people are calling "turbo lag" may actually be the transmission. In this case, Audi used a standard automatic in this application versus the DSG, and that makes a big difference. The pre-2022 VW Arteon had the same issue - plenty of HP, but the transmission held it back. If Audi had used the DSG, this would be a substantially quicker, more engaging car. In any case, I don't get these "entry lux" compact CUVs (think: Cadillac XT4, Lexus NX, BMW X1, etc). If you must have a compact CUV, I can think of far better options for a lot less money. And, no, the Tiguan isn't one of them - it has the Miller-cycle 2.0T, so it's a dog. But a Mazda CX-30 with the 2.5T would fit the bill.