As Nissan Readies Cuts of All Kinds, Does Any Model Have Momentum?
As you read last week, Nissan is busy sharpening its axe, ready to chop the company back to sunnier balance sheets. Some 12,500 positions, or more than 9 percent of the automaker’s global workforce, are poised to disappear as Nissan attempts to recover from a serious slump.
News of the cull came on the heels of a dismal first-quarter earnings report in which the company revealed a net income loss of 94.5 percent. Its operating margin? A prosciutto-thin 0.1 percent, down from 4 percent a year earlier. Something needs to give.
What will give are jobs, a lot of them, and numerous car models — roughly 10 percent of the brand’s global lineup by 2022, the automaker said. Most of those models will be el-cheapo offerings in developing markets. As for sales, the automaker finds itself sliding in a major market where bright points of light are hard to find.
Let’s search for those stars.
The first half of 2019 brought a U.S. sales loss of 8.2 percent for the combined Nissan and Infiniti brands, with the more affordable of the two down 7.7 percent. Infiniti sank 12.6 percent. This far outpaces the broader slump impacting the North American new car markert.
A regional problem? Hardly. Last week’s earnings report showed declining sales in the automaker’s home market, the United States, Europe, Africa, the Middle East, and parts of Asia excluding China. In the People’s Republic, volume rose less than a percentage point in the last quarter.
Such was the automaker’s gloom, its June U.S. sales report was forced to tout the performance of the low-volume NV200 commercial van and the outgoing Versa, which loses its hatchback variant when the next-gen model arrives later this summer. Versa sales rose 6.6 percent through June — making it the only Nissan- or Infiniti-badged passenger car to buck the downhill trend.
While the midsize Altima underwent a top-down revamp for the current model year, customers didn’t follow. Sales of the midsize sedan fell 12.1 percent over the first half of the year. As for the Maxima, that model finds itself in free-fall mode, down over 30 percent through June and 53.8 percent for the month itself.
Much more alarmingly, light truck sales at both divisions ended the half-year mark in the negative category. For Nissan, this news carries more red flags than a Soviet parade. Everyone knows cars are on their way out, but as long as everything’s ship-shape in the truck realm, things will generally be okay. Not so at Nissan. The company’s full-size Titan and Titan XD pickups are losing ground against updated offerings from Detroit, with combined sales down 22.6 percent over the first six months of the year (Nissan dropped a truck shift at its Canton, Mississippi assembly plant in January). The nameplate just saw its eighth consecutive year-over-year loss.
Even the perennially popular Frontier, despite a June sales boost, is down 5.7 percent, year to date.
The common-as-crabgrass Rogue and slightly smaller Rogue Sport? A decline of 18.6 percent. The midsize Murano, slightly refreshed (mainly in terms of content) for 2019, slid 33.1 percent over the first half. Minus the aforementioned NV line, only the hulking Armada (up 1.5 percent) and three-row Pathfinder (up 7.7 percent) can boast of a YTD volume gain.
While Nissan, as it has in the past, could throw money at new car buyers, it seems to be sticking to its promise to ease up on incentivization. In late June, ALG forecasted no significant increase — or drop — in incentive spend per vehicle for the automaker.
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