The reasons why Nissan is doing so poorly in the auto market include the friction between the company and Carlos Ghosn, slow technological growth, company sales policies, consumer complaints, and other factors that have resulted in sales decline in the automotive company.
The drastic fall in revenue and profits has caused a strain on one of the world’s largest automotive manufacturers, Nissan. Its vast losses in the past few years have become a cause of concern for its fate in the world of car manufacturing.
Nissan Motors corporation (NIMC) is reputable for its longevity in auto manufacturing and the production of different models of cars. Such as Pathfinder, Rogue, Altima, Maxima Frontier, etc.
However, it took a massive hit caused by various problems, including the inferior car products, and the fallout with ex-CEO Carlos Ghosn.
Since its inception, Nissan has had its share of conflict. In the late 1990s, Nissan was on the brink of bankruptcy, but an alliance with French auto company Renault saved it from shutting down.
However, would the prominent automakers be able to wield this recent storm and survive?
This question prompts us to find out why Nissan is doing poorly in recent years.
Reasons Why Nissan is Doing So Poorly
The Ghosn’s Scandal
Nissan’s fallout with long term CEO Carlos Ghosn in 2018 started the impending disaster in the company. Ghosn was sacked and arrested over misusing the company’s funds and understating his income reports.
Furthermore, he propelled the company’s imminent decline when he undertook an ambitious project, which increased their share in the global market but resulted in huge losses years later. This internal friction affected the company’s administration and image.
Fast Expansion
After the global depression of 2008, Ghosn, Nissan ex-CEO, invested heavily in the emerging markets of Brazil, India, Russia.
He also increased their market sales in America.
He intended to increase the company’s share in the global market and expand the company’s business. As much as growing a business is a good idea, it did not work for Nissan. The emerging markets had economic troubles that led to accrued debts in the long run.
Sales Incentive Program
Ghosn also introduced the stair-step method where cash rewards are given to dealers if they hit a particular sales target.
At first, the plan yielded good results and increased sales, but as the years passed, dealers could no longer meet up with their targets. Many resorted to cutting prices, reselling cars as used cars, and other activities just to drive sales.
Consequently, these dealers’ actions resulted in heavy discounts, which ate deep into the company’s profits.
After the dismissal of Ghosn, the new CEO, Saikawa, changed the company’s sales strategy. Dealers could not offer bargain discounts to customers, and buyers significantly reduced.
Slow Technological Advancement
Car manufacturers are regularly upgrading their products with enticing features to boost sales and increase growth. In Nissan’s case, the company is sluggish towards adding new technologies to their cars.
Some of their models have not had significant changes for a long time. For example, Nissan’s Frontier, also known as the anti-luxury truck, has not had significant changes since 2004! Also, Pathfinder’s last significant change was in 2013.
Although it is arguably true that the company’s prized electric car, Nissan LEAF, has had prospective changes, changes are slow compared to their competitors, Honda and Toyota.
Nissan is just now getting around to introducing Android Auto and Apple Carplay, particularly in its Infiniti collection, which embodies modern smartphone integration for the 2020 model year. This stagnant attitude to growth has caused Nissan’s doing poorly.
Poor Quality and Average Reliability
Nissan owners have laid complaints and even filed lawsuits in the problems they have encountered in using Nissan cars.
Common customer complaints are that they bought Nissan products due to their reputation of being reliable but were disappointed with the cars.
This is fairly common with cheaper cars since you get what you pay for. Here are some other products you should be on the lookout for cheaper parts—
- Subaru BRZ
- Audi TT
- Cadillac CTS
- Mazda Miata
- BMW Z4
- Jaguar F-Type
- Genesis G80
- Kia Stinger
- Corvette Stingray
- Honda CRZ
- Dodge Charger
Change in Consumers Preference
In America, the demand for Trucks and SUVs have massively affected Nissan’s Sedans and Compact cars. Which are the company’s primary production models, and this has hindered growth. In 2019, The Toyota RAV4 and Honda compact SUV replaced Nissan Rogue and Rogue Sport in annual market sales.
Problems of Nissan Car Products
Consumers complaints about Nissan CVTs
Nissan owners have expressed their displeasure over Nissan CVT models. The Continuously Variable Transmission is a heavy-duty drive belt that runs within a pulley system with hydraulic actuators allowing cars to run seamlessly.
Some of the advantages of the CVT are smoother drive experiences, fuel efficiency, less heat, and less friction. However, the experiences of Nissan owners have shown that CVT featured cars have a lot of problems that cost users huge expenses and unpleasant driving experiences. Some of the issues include—
- overheating
- power failures
- coolant leaks
The list can go on.
These problems were widespread in models such as Sentra, Altima, Xtronic, etc. This review indicates that users’ experiences have affected Nissan ratings in the auto market.
Faulty Backup Cameras
In September 2019, Nissan recalled more than a million vehicles due to a fault in the backup cameras that allowed users to disconnect their backup camera images from appearing. The faulty backup camera is a violation of Federal safety laws. Among the affected is mostly Nissan Altima and Frontier.
Faulty AEB Systems
Autonomous Emergency Braking systems(AEB) is a recent safety feature that allows sensors to detect an imminent collision and applies the breaks. The defect in the system has had some Nissan cars stopping even when there is no looming collision.
Oil leaks
It is usual for a vehicle to experience oil leaks after some years, but when this is the situation of a new car, it is questionable. It is not too late to install an oil catch can if you have not already. In addition to that, make sure your oil has the right viscosity and sticks to your dipstick.
In 2011, 15,000 Nissan vehicles in North America, especially the Infiniti luxury models, experienced excess oil leaks. The inferiority of the bolts in the oil filter causes the bolts to break easily and cause oil leaks.
Others issues include
- Faulty hood latch.
- Exploding Sunroofs.
- Brake fluid leaks.
- Emissions Scandal.
- Defective Takata airbag.
Recalls and Extended Warranty
Over the years, Nissan’s products have had issues that prompted manufacturers to recall vehicles and extend warranties. Nissan spends a considerable amount of money fixing customers’ faulty cars. In March 2021, Nissan recalled twenty-one 2021 Nissan Rogue due to wrong wheel knots.
Nissan Lawsuits
The poor quality of Nissan products has led to numerous class-action lawsuits over the years. Some of the complaints include transmission defaults, faulty automatic emergency braking systems, etc. Nissan has spent millions on recalls, extended warranties, and court settlements.
This negligence has contributed to Nissan doing poorly and left customers dissatisfied.
Is there any hope for Nissan?
Nissan is a company not new to setbacks and financial losses. The future may look bleak, but the company is putting measures to fall back on track in years to come.
What is the Way Forward for Nissan?
Beaten but not yet defeated, Nissan is making efforts to make a comeback to the auto market. First, Nissan has rebranded its logo and brand description. Although this may seem unnecessary, a slightly positive impact is worth a try.
Nissan has also reduced its workforce, especially in the manufacturing unit, and decreased its annual sales from 8 million to 5 million vehicles. Possibly, this move would help cut expenses.
Nissan is releasing new models of electric vehicles. The Ariya electric crossover SUV is in line with clients’ present demand. Hopefully, this product would be in great need and put Nissan back in the spotlight.
Additionally, Nissan is introducing the seventh edition of the Z sports car into the market. Its features are a 3.0-litre V6 engine with 400 horsepower, Electronically assisted steering, equipped safety technologies, an 8.0-inch touchscreen system, and more!
The company also plans to lead its competitors’ market by making more carbon fibre materials available to its models.
With these strategies, they hope to right their wrongs and take their place once again in the auto world.
Conclusion
Nissan may have steered in the wrong direction in the past decade, but there is still hope for the world’s renowned automakers.
The company has wielded the storms of near bankruptcy in the 1990s. There is a ray of hope that it may also curtail the issues that threaten their existence this time.
The reasons why Nissan is doing so poorly in the auto market include the friction between the company and Carlos Ghosn, slow technological growth, company sales policies, consumer complaints, and other factors that have resulted in sales decline in the automotive company.
However, Nissan is not giving up. Nissan’s reduction of the company’s workforce, the introduction of Ariya electric SUVs and Z sports cars, and a rebranded logo will help restructure and revive the company’s economy for a more significant comeback.
Current CEO Uchida has a transformation plan to prioritize their core product line and stay true to their company mission. In doing this, they plan to reduce costs, reduce emissions and continue restructuring their processes. It is a new era for Nissan as they look to steadily grow profit and stay profitable by the end of 2023.
