Flush With 2017 Models, Nissan Throws Incentives at Sales Staff

Expect your local Nissan salesman to work extra hard for that pre-Christmas sale. That’s because Nissan, which can still boast a year-to-date sales increase in the United States, isn’t exactly overflowing with 2018 models.

Inventory of 2017s remains higher than the automaker would prefer, meaning it needs to do something to move old stock out before the end of the year. But rather than heap more factory bonuses on its vehicles (the company’s incentive spending is second only to Kia in the industry), Nissan figures it’s a better deal to throw incentives at the salesperson.

“Happy holidays. Can I interest you in a new Rogue? Seriously, how ’bout that Rogue?”

According to Automotive News, 60 out of every 100 vehicles on U.S. Nissan lots is a 2017 model. Blame the late launch of several 2018 models and a general downturn in the industry.

The solution, in Nissan’s mind, involves tossing $100 at salespeople for every sale reached, and $50 to the sales manager. This is on top of any existing staff sales incentives.

Nissan’s new “spiff” is great news for salespeople with a knack for closing the deal, but it isn’t necessarily making dealers happy. One Nissan retailer told AN that the incentive just leads to salespeople chasing “low-hanging fruit” — easy sales, often of low-profit models. Others would prefer to see factory cash sent to dealers, not salespeople.

While its sales are indeed up, both in November and the year as a whole, steep customer incentives and an increase in fleet volume hasn’t put the company on stable financial ground. At least, not in North America. Operating profit in that region fell 42 percent in the first half of 2017.

Under the direction of new CEO Hiroto Saikawa, Nissan’s aggressive sales targets are a thing of the past. The game plan for North America is now “steady, profitable growth,” according to the automaker’s North American chairman, Jose Munoz.

That could explain why December incentives are more or less steady compared to the month previous.

“We’re actually flat in overall incentives,” Judy Wheeler, Nissan Division vice president of U.S. sales, told AN. “The dollar amount per unit is flat from November to December. We’re just packaging it in a little different way. And we’re down from a year ago.”

In October 2017, Nissan’s U.S. incentive spending (as percentage of ATP) stood at 16.4 percent, well above the industry average of 11.3 percent. That spending dropped to 14.6 percent of ATP in November.

Year-over-year sales at both Nissan and Infiniti rose last month — 19.3 and 7.5 percent, respectively, mainly due to the popularity of light truck models like the Armada, Rogue, Frontier and Titan. Over the first 11 months of 2017, sales are up 2.1 percent at Nissan and 14.1 percent at Infiniti. Again, the increase has nothing to do with car sales.

Total passenger car volume is down 9 percent YTD, offset by a 16-percent increase in light truck sales.

[Image: Nissan]