Nissan Is Bleeding Market Share And Dealer Profitability

Nissan dealers in the United States are living through a traumatic experience.

Profitability has plummeted to its worst in 15 years, leaving almost 40% of Nissan's 1,071 dealers hemorrhaging money. It's a grim scene, but these aren't my words–according to a report from Automotive News, average net profit has cratered by a staggering 70% in the first half of 2024.

The problem is multipronged: a glaring lack of hybrid options and too many dealerships competing for a piece of Nissan's rapidly shrinking market share across the country. According to dealership personnel, Nissan dealers are selling half the volume compared to competing Honda, Toyota, Subaru, and Hyundai stores. This has a knock-on effect down the chain; new car sales feed profit centers like financing, service, and parts, along with generating trade-ins, which in turn feed finance, service, and parts.

Some say Nissan simply has too many dealerships. With market share dwindling to 5.8%–down from 7.7% five years ago–there simply isn’t enough volume to support the current number of dealerships. Dealers are suggesting Nissan needs to trim the fat, possibly reducing the number of stores by up to 40%. Unfortunately, there’s no indication Nissan has the cash on hand to incentivize underperforming dealers to give up.

Nissan is trying to turn things around with new products like the redesigned Kicks, Armada, and Murano. Nissan plans to introduce its e-Power series hybrid system to the U.S. within the next three years, and will deliver a plug-in hybrid model based on the Mitsubishi Outlander PHEV's powertrain–a project born from the recently announced tie-up with Honda and Mitsubishi.

Nissan is one of the only major automakers that doesn't offer a mild or plug-in hybrid vehicle in the U.S.– the other is General Motors. The next-generation Nissan Rogue, expected in 2027, will have e-Power and PHEV variants. Meanwhile, Hybrid or PHEV powertrains accounted for 29 percent of Toyota's 2 million plus U.S. sales last year; and roughly half of Honda's Accord and CR-V sales are attributed to hybrid power.

Nissan execs have told dealers it aims to end the fiscal year with a retail market share of 6.2 percent, up from 5.4 percent in 2023; the dealers think those figures are aspirational. It’s a tough time to be Nissan, we're sorry to hear that.

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