It’s gonna cost ya!

Carlos Goshen wants market share and he wants it bad. Despite a just announced net revenue of over 4.1 Billion in its past Fiscal year, the mastermind of the Nissan-Renault partnership is not satisfied.  Goshn, despite a 4% growth in the US last year, declared the US to be Nissan’s biggest disappointment for the year.

     A recent round of, lineup-wide, price cuts could be an attempt to gain the market share Goshn so desperately wants. The eventual goal is to have a 10% share of the US market. So, with a goal in place, Goshn has given the US branch of Nissan an order, double your sales by 2017.

To reach this lofty goal, Nissan has a 3-part plan. First, Nissan plans to increase its sales per dealership, an area where it lags greatly behind competitors Honda and Toyota. Honda and Toyota stores average 1,220 and 1,491 sales per franchise respectfully while Nissan manages just 959. Second, the plan is to increase its number of franchises (dealerships) in the country. Finally, Nissan plans to maintain and increase its marketing efforts.

One reason for Goshn’s focus on the US could be that, because Renault does not sell cars in the US, Nissan is his only chance to capitalize on this lucrative market. Even with a cutting edge new lineup, which includes well-reviewed cars like the new Altima, it will be a tall order for Nissan USA to double their sales in 4 years in a competitive industry. It can be done, but it will come at a cost. Market share is not “cheap.” Unless you have a product that is far superior to your competitors or costs that are substantially lower, the only way to grow is to shrink your margins to make your cars cheaper in comparison to your competition. But, with 4.1 billion in revenue last year, Nissan may have the capital necessary to push for more market share.

 

Sources:

https://www.google.com/search?q=nissan+revenue&bav=on.2,or.r_qf.&bvm=bv.46471029,d.dmQ&biw=1218&bih=707&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=JcSTUfvcLLSx4APGrYG4BQ#um=1&hl=en&tbm=isch&sa=1&q=ghosn+market+share&oq=ghosn+market+share&gs_l=img.3…12958.14780.3.14947.13.13.0.0.0.0.98.600.13.13.0…0.0…1c.1.12.img.A2nYgfjtSuI&bav=on.2,or.r_qf.&bvm=bv.46471029,d.dmg&fp=404038c72d5dbb21&biw=1218&bih=707

http://www.autoblog.com/2013/05/13/ghosn-orders-nissan-usa-to-double-sales-by-2017/

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130512/RETAIL01/305139943#axzz2THtMHpHD

3 comments to It’s gonna cost ya!

  • oliver

    How you get market share is just as important a consideration as marketshare itself. From the Vlasic book we learned that using incentives to sell cars can project the message that the cars themselves are cheap, low-quality vehicles. Nissan should be wary of sending this message. Also on the other end of the spectrum, Ferrari has said that it intends to sell fewer cars this year than last so as to reaffirm the exclusivity of the brand–selling six-figure cars isn’t enough apparently. In the May 10 episode of Autoline After Hours, the pannel speaks on how Ferrari has done some silly things in their marketing such as their theme park Ferrari World Abu Dhabi that project the wrong image for the brand.

  • gjeong

    Carlos Goshen is a bit of an unusual guy. He once said he considered getting rid of Infiniti because Nissan did not need the Infiniti brand, which shocked many people. Well, this kind of makes sense to some business people because Infiniti did not make good sales for a long time. The reason why I am bringing up this is that Carlos Goshen cares so much about profit, which helps us to understand why he was disappointed at the $4.1+ billion revenue. Maybe having a aggressive CEO like Carlos might be a fortune to Nissan. We will see what will happen with Carlos’s strategy.

  • In the US, Nissan used to be the market leader among import marques. While that was in the early 1970s, it does speak to things gone wrong … which is why a Lebanese-Brazilian is now the CEO.

    Dropping list price is better than increasing incentives in terms of image. But unless sales are elastic in price, it lowers total revenue and likely profits. Instead what they need is hot product.

    Dealers may not sell as many cars as those of Toyota or Honda, but surely that’s not their fault, it’s the product and the number of dealers. Hiking the number of dealers may be good for Nissan sales, but it surely works to LOWER sales per dealer!!