Nissan has been having a hard time recently, and the successive news is not particularly positive.
For Nissan, a major news event in the near future is that it will form a new automobile alliance with Honda and Mitsubishi Motors to achieve “regiment heating”.
But Carlos Ghosn, former chairman of the Renault-Nissan-Mitsubishi alliance, is not optimistic about the new alliance, saying that the new tripartite partnership faces major challenges.
“this cooperation looks more like Honda’s acquisition of the other two companies.
” rather than real equal cooperation, Carlos Ghosn said, and the key to his conclusion is that Nissan and Mitsubishi are not as strong as Honda.
According to foreign media reports, Nissan has slashed its full-year performance forecast, mainly because of its sharp drop in profits in the second quarter.
In the second quarter of this year, Nissan’s operating profit totaled about 1 billion yen ($6.
5 million), compared with 128.
6 billion yen in the same period last year, down 99.
2% from a year earlier, and its operating margin was 0%, down 4.
4% from last year.
Net profit was 28.
6 billion yen, down 76.
9 billion yen, or 72.
9 percent.
While profitability plummeted, Nissan slipped in the global rankings.
A few days ago, a research institute released the latest ranking of global sales of car companies.
BYD, a new energy vehicle company from China, became the seventh largest automaker in the world in the second quarter of this year (in the second quarter of 2023, BYD ranked 10th in the world with sales of 700000 vehicles), and one of the automakers it overtook was Nissan.
In the second quarter of this year, Nissan sold 787000 vehicles worldwide, roughly the same as the same period last year, but it was able to maintain the size of the market at the cost of substantial terminal profits (not only in China, but also in the United States.
Nissan also offered a big discount), which is also an important reason for the sharp decline in its profitability in the second quarter.
In the second quarter of this year, the United States and China were Nissan’s two largest markets and the only two markets where it sold more than 100000 vehicles.
But Nissan also cut its full-year retail sales forecast because of lower-than-expected sales in the US and China.
Dongfeng Nissan’s market difficulties, the market continues to be not as expected, has become the recent key words of Nissan.
In July, foreign media reported that Nissan cut production at its Kyushu plant in japan by 1/3 to less than 25000 vehicles because of weak demand in the u.s. market.
Earlier, news of closure and merger was also reported at Nissan’s two domestic factories.
First, it was exposed that Dongfeng Nissan’s Wuhan Yunfeng factory had to “OEM” Lantu cars, and then Dongfeng Nissan’s Changzhou plant was rumored to stop production.
Wuhan Yunfeng Factory and Changzhou Factory are both new factories of Dongfeng Nissan.
According to the information of global auto finishing, Dongfeng Nissan Wuhan Yunfeng factory was built in 2018 and originally planned to be completed in 2020.
In fact, it was not officially put into production until the end of 2021.
The Changzhou plant, originally the Changzhou base of Dongfeng Motor, was upgraded to a Dongfeng Nissan plant, and the asset restructuring agreement was signed in 2018 and 2020.
It is clear that 2018 is the key point for Dongfeng Nissan’s capacity expansion, simply because the market size of Dongfeng Nissan reached its peak at that time.
Nissan officially launched its joint venture in China in 2003 and achieved its “peak moment” in the Chinese market around 2018.
Dongfeng Nissan officially entered the “annual sales club of millions of vehicles” in 2015, and the annual sales of Dongfeng Nissan exceeded 1.
3 million vehicles for the first time in 2018.
When the market is booming, there is indeed a real demand to further increase production capacity.
But it backfired.
After two new factories were built, Dongfeng Nissan began to go downhill.
Dongfeng Nissan’s annual sales remained at more than 1.
3 million vehicles in 2019, but there has been a small decline compared with 2018.
Over the next few years, Dongfeng Nissan’s market shrank sharply, falling back to less than a million vehicles in 2022, leaving annual sales of just over 700,000 vehicles in 2023, nearly half the performance of the market at its peak.
Annual sales continue to decline, but capacity is expanding, Dongfeng Nissan’s capacity utilization will certainly not be too optimistic.
According to the relevant data of Gaia system, the overall capacity of seven factories owned by Dongfeng Nissan in 2023 reached 1.
8 million vehicles, of which 4 factories had less than 30% capacity utilization, and the newly put into production plants in Wuhan and Changzhou all had less than 10% capacity utilization.
The low capacity utilization of the new factory also has a lot to do with the models it puts into production.
Take the Wuhan plant with the lowest capacity utilization as an example, which was originally reserved for the replacement Qijun and the new energy product Aliya, but the market performance of both models was dismal, far from what Dongfeng Nissan had expected.
In 2021, Dongfeng Nissan introduced the new Qijun, in order to achieve the purpose of energy saving and emission reduction, the new Qijun was replaced with a three-cylinder engine, but the terminal market did not buy it.
After the replacement, sales of Qijun plummeted, becoming a “scrap” of the market from the main model of Dongfeng Nissan.
Even if the hybrid version of Qijun e-POWER is launched later, the market performance is not significantly improved.
The performance of the pure electric model Ariel is even more disastrous.
When the new car was introduced, Dongfeng Nissan, as a global strategic electric car of Nissan, was full of confidence and set a price for the compact all-electric SUV starting at 272800.
The end market also quickly gave feedback.
In the environment of increasingly fierce competition in the domestic electric car market, Arieya’s monthly sales were unexpectedly slow, and monthly sales of more than 500 vehicles were rare.
Although the price has been readjusted through product replacement (substantially reduced), consumers are still not convinced.
In the last two months, Arieya’s monthly sales have dropped to double digits.
The models put into production are seriously unsalable, and it is only reasonable that the new factory of Dongfeng Nissan will be closed and reopened.
Xuanyi is a car that has carried everything.
At present, Qijun and AiRuiya are far from the only ones suffering from market difficulties for Dongfeng Nissan’s products.
In fact, in addition to Xuanyi, which can also rely on its previous market heritage and substantial terminal profits to maintain market stability, most of Dongfeng Nissan’s models are facing no small market problems.
Sales data compiled by the Global Automotive Research Institute show that Xuanyi’s share of Dongfeng Nissan’s sales has continued to rise in recent years.
Around 2016, the sales structure of Dongfeng Nissan’s products is relatively average, and many models can be counted as the best-selling models in market segments.
But after entering 2021, it is basically a big pattern for Xuanyi to carry Dongfeng Nissan forward.
Xuanyi accounted for more than 50% of Dongfeng Nissan’s overall sales for the first time in 2021, and that proportion has risen to nearly 60% (57%) by 2023.
Qijun was once the main model of Dongfeng Nissan, accounting for nearly 20 per cent of sales, but its market popularity has plummeted after the replacement in 2021, accounting for less than 5 per cent of Dongfeng Nissan’s overall sales in 2022.
Under normal circumstances, the replacement of a new car with a good mass base can bring quite a good boost to the market.
Qijun was once the most important market for Dongfeng Nissan in the SUV field, and it is also a heavyweight model that many Chinese consumers have been waiting for for seven years to replace.
The official announced that the Xinqijun project lasted five years, with a cumulative investment of 19 billion yuan, which is the largest and most complex project in Nissan history.
But it was such a new car that had been expected to be full and the authorities attached great importance to it, because it was equipped with a three-cylinder engine and was quickly “abandoned” by Chinese consumers.
At its peak, Qijun’s annual sales were 200000 +, but now, after the launch of Qijun Glory Edition, Qijun e-POWER and other versions, the annual sales of the entire Qijun family are only 50, 000 vehicles (2023 data).
In addition, it is worth mentioning that although Xuanyi has a large proportion of sales, its current ability to contribute to profits is not high.
According to the relevant data collated by the Global Automotive Research Institute, the Xuanyi car department is already in the price depression of the same level of models.
The average price of Xuanyi classic is less than 70,000 yuan, which, like Lang Yi Xinrui, is a typical representative of low-cost cars in the current domestic mainstream sedan sedan market.
Gaishi Automotive Research Institute predicts that in the coming period of time, the market pressure brought by independent new energy sedan chairs will increase unabated, and the possibility of further exploring the terminal price of the traditional joint venture car represented by Xuanyi still exists.
Hey, Dongfeng Nissan, what else can I do? Xuanyi cars are trading in price for volume, but for a large joint venture car company, it is undoubtedly very dangerous to rely on only one model to maintain the state of the market, not only greatly reduced profitability, but also little room for operation to cope with market changes.
If Nissan still has expectations for the Chinese market, it must make changes, adjust its development strategy in line with the changes of the times, and create new best-selling models.
The Global Automotive Research Institute pointed out that the main reasons for the continuous decline in Dongfeng’s daily production and sales can be attributed to the following points.
For one thing, the product structure is too single, and the update speed of new cars is slow.
After the launch of the all-electric model Aireya in 2022, it was not until 2024 that Dongfeng Nissan launched another brand-new model, Land Exploration.
On the rhythm of the launch of new cars, Dongfeng Nissan has obviously failed to keep up with the current iterative pace of renewal in the domestic automobile market.
The second is that the product strategy is seriously out of touch with the consumer demand of the Chinese market, as evidenced by the push of three cylinders of Qijun.
Before the launch of Qijun, SAIC GM and Changan Ford had already proved that Chinese consumers’ low acceptance of three-cylinder engines, the sales of three-cylinder Yinglong were halved, and the market performance of three-cylinder focus directly collapsed.
However, when the new generation of domestic Qijun went public, Nissan chose to put all its eggs in one basket, pushing the three-cylinder engine, and the feedback from the market was also very fierce.
Novel Jun has become another typical failure case of pushing three-cylinder engines in the domestic automobile market.
In addition, Dongfeng Nissan has previously focused on promoting e-POWER models at a time when new energy vehicle consumption in China has exploded in an all-out way.
Although Nissan’s e-POWER technology is similar to the very popular extended range technology in the domestic market nowadays, the e-POWER system is equipped with a small battery and has no charging function, so it does not belong to the category of new energy vehicles in China, and the market acceptance is relatively limited.
Qijun e-POWER, photo source: Dongfeng Nissan, the third and perhaps most important point, the electrification and intelligent transformation of Dongfeng Nissan is too slow.
The previously launched electric car Aliya is obviously not competitive enough in terms of price and intelligence.
Dongfeng Nissan’s Qichen brand has launched a plug-in model– Qichen Big V, pure electric model– Qichen VX6, but brand recognition is limited, and after the new car is launched, it has not set off too much market spray.
What should we do next? At this year’s Beijing Auto Show, the president and CEO of Nissan has already given the answer: “Great changes are taking place in the Chinese market.
” Nissan needs to respond quickly and remain competitive.
” Specific measures, one is to speed up the replacement of products, and the other is to speed up the electrified and intelligent track.
Nissan previously announced that it plans to replace 73 per cent of its brand lineup in China by fiscal year 2026 and launch eight new energy vehicles, including five Nissan-branded models.
At the same time, Nissan also announced that it would cooperate with China’s leading companies in the field of intelligence.
In addition, in early August, Nissan and Honda jointly announced that the two companies had agreed to conduct joint research in the area of basic technology in the field of SDV (next-generation software-defined vehicle) platforms.
“in China, for China” is a commitment that Nissan officials have always adhered to, but now, after missing the window for the development of electrification and intelligence in China’s automobile market, it is becoming more and more difficult to realize this promise.
To optimize production capacity, adjust the product camp, and accelerate the transformation of electrification and intelligence are basically routine operations that mainstream joint venture brands are doing in the current domestic market.
Whether Dongfeng Nissan can rely on these measures to ride out the current “hard times” of the market smoothly remains to be seen.
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