In June 2011, Nissan introduced a bold plan. Despite the backdrop of the 2007-08 economic crisis, and an economy that was still reeling from its effects, Nissan Frontier management announced a seemingly impossible goal – to achieve 10% market share in North America.
This was, indeed, a titanic undertaking. In 2011, Nissan held a little under 7% of the North American market share, and in the low-margin, ultra-high competition world of automotive manufacturing, many people were skeptical that Nissan could succeed.
But in February 2017, Nissan defied expectations, releasing sales numbers that showed a 10.2% market share. And though sales figures ebb slightly from month to month, Nissan has clearly hit their goal.
This is even more impressive when you consider the past market share of Nissan. In 2004, Nissan held only 4.8% of the North American market. That means that in just over 10 years, Nissan has more than doubled their market share in North America.
But how did this happen? How can a company like Nissan succeed in today’s economy, and in the difficult world of automotive manufacturing? Let’s take a look now.
Smarter Car Design That Appeals To The Masses
One of the primary components to Nissan’s recent success is smarter car design that appeals to a larger majority of car buyers. In 2011, the Nissan Sentra was being outsold by the Honda Civic and the Toyota Corolla by 2-1 in some markets – despite the fact that it used to be the single most popular import in the U.S. automotive industry.
Nissan had tried to market the Sentra as an edgier, sportier subcompact car, and their efforts had failed – so they took the Sentra back to the drawing board.
They created a roomier, more fuel-efficient Sentra that could compete not only with small subcompact cars like the Honda Civic and Toyota Corolla, but with larger cars such as the Honda Accord and the Toyota Camry.
A sedan that once was failing in the mid-size market quickly became a powerhouse, and since 2012, the Sentra has been on an upward market trend, and continues to compete with Toyota and Honda.
More Aggressive Leasing Strategies
Leasing is becoming increasingly common in America. Approximately ⅓ of all new car and truck transactions in 2016 were leased. For comparison, only about 24% of all car buyers chose to lease their vehicles in 2010.
To take advantage of this new trend, Nissan began pushing new, more aggressive leasing strategies, especially with higher-cost vehicles like the Maxima and Murano, which boast price tags in excess of $40,000.
These higher-cost vehicles are out of reach for many consumers who wish to buy – but the lower down payments and monthly costs for an auto lease can open up new markets, and allow Nissan dealers to sell to people who may otherwise be priced out of a more luxurious vehicle.
Expansion Of Regional Sales Teams, And More Regional Autonomy
Over the last 6 years, Nissan North America Chairman Jose Munoz took radical steps to change the way that Nissan does business with their dealerships. He added three more regional sales teams, bringing the total number of regions Nissan deals with to 8, and allowing each region to focus more closely on its target market.
In addition, Munoz provided regional vice-presidents and board with more decision-making authority, allowing them to react to local markets more effectively, and provide better leadership and decision-making capabilities to each and every market region.
Regions could now decide what vehicles they would offer at dealerships, local incentivization and ad strategies, and ad budgets – and had the power to implement these strategies on their own, with less micromanagement from the national Nissan North America office.
This increased emphasis on regional autonomy has allowed sales teams and executives to focus on their regions in a more granular fashion – and has resulted in more sales, and a larger overall market share.
An Increased Focus On Customer Satisfaction
There is no substitute for happy customers. In 2016, Nissan surpassed both Toyota and Honda on J.D. Power’s annual Customer Service Index, which measures overall satisfaction with product quality, as well as the Power Sales Satisfaction Index, which measures the customer’s satisfaction with their overall dealership and purchasing experience.
Part of this reason is that Nissan dealers have been heavily incentivized to provide great service – whether they’re selling cars or maintaining them. Hitting sales targets and customer satisfaction targets can provide dealership management and sales teams with great rewards, and allow for a better overall customer service experience. That’s a win-win!
Nissan – On A Path To Continue Growing
The dramatic growth of Nissan as a company should serve as a reminder to other automakers – if you rest on your laurels, and you don’t try to improve every day, you’ll quickly find yourself lagging behind.
And Nissan hasn’t stopped investing in its future. Though the company has met their sales goal, they’re ready to continue growing. As Nissan crossovers like the Rogue continue to sell well, the company has their eyes solidly in the future – and in 2017, Nissan has turned their efforts towards light trucks, with the introduction of the 2017 Pathfinder and the 2017 Titan.
It will be exciting indeed to see how Nissan continues to grow, and if their emphasis on competing in the North American market continues to drive sales, and increase their market share.