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Nissan’s New Sales Policy: A Strategic Move to Address Inventory Glut
As the month of May commenced, Nissan introduced a groundbreaking sales policy for its dealers, allowing them to advertise cars at discounts of up to 10 percent off the invoice price, a significant departure from the typical Manufacturer’s Suggested Retail Price (MSRP). The rationale behind this bold move appears to stem from an overabundance of Nissan vehicles languishing on dealer lots, leading to the implementation of this new initiative.
Unlike the scarcity experienced during the pandemic, Nissan currently finds itself grappling with a surplus of inventory, with a staggering 98 days’ worth of vehicles either stationed at dealerships or in transit on trucks. With the impending launch of the 2025 models, Nissan faces the pressing need to find storage space for these new vehicles to prevent inventory congestion. However, dealers have expressed mixed sentiments towards the new sales policy, as reported by Automotive News:
Some dealers argue that Nissan should ramp up incentive spending and Tier 1 marketing strategies to facilitate the movement of inventory, rather than shifting the burden onto the dealer network. “Nissan is essentially saying, ‘We cannot afford to be in the market, so the onus falls on you,'” expressed one dealer anonymously, fearing repercussions from the automaker. “The onus has been shifted from the factory to us.”
It is conceivable that Nissan aims to shield its financial reports from additional expenditures, especially considering the impressive 51 percent surge in operating profit reported for the 2023 fiscal year compared to 2022. Furthermore, Nissan endeavors to sustain this positive momentum in 2024; nevertheless, industry analysts foresee a potential decline in sales for the current year. The increasingly tepid demand coupled with an excess supply from the previous year signals an opportune period for prospective buyers to capitalize on advantageous deals, particularly for new models like the Z.
In the quest to maintain favorable financial figures, Nissan’s current strategy appears astute: capitalize on sales while transferring a portion of the associated costs to dealers. Although some dealership owners may encounter financial constraints this year, their sacrifices are positioned as instrumental in enhancing the overall corporate performance. This calculated approach reflects Nissan’s commitment to weathering the anticipated slowdown in sales and navigating through the complexities of excess inventory with strategic acumen.
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