Dealing with diminishing profits, Nissan Motor clips a global lineup that includes more than 60 nameplates across the Nissan, Infiniti and Datsun brands.
The Japanese automaker disclosed that it will reduce its product portfolio by at least 10 percent by March 31, 2022. It’s part of a sweeping renovation that also involves cuts in work force and production capacity.
The product reductions will focus mainly on small vehicles, including emerging-market Datsun models, CEO Hiroto Saikawa said.
Nissan could also shrink the options and packages offered on its vehicles. The numerous variations are proving expensive and complicated as marketing and incentive supports are strained.
Nissan’s compact cars are low-hanging fruit for consolidation in a U.S. market that has lost much of its enthusiasm for sedans.
“They’ve just got too many sedans for this market,” said Jeff Schuster, president of global forecasting at LMC Automotive. “I don’t see them all go, but I could see consolidation if Nissan looks to the U.S. for the cuts.”
Analysts see the Versa subcompact and Sentra compact as redundant in a shrinking sector. Both cars are favorites of rental fleets, a market historically leaned on to grab market share. Nissan’s latest business reboot, however, has it steering away from profit-sapping rental-fleet customers.
Nissan is not alone in taking cutting an overgrown portfolio. In May, Mercedes-Benz told its U.S. dealers it will drop some models and equipment packages in the coming year.
But for an automaker that makes product decisions with a global outlook, as Nissan does, killing a model is not so easy. Small sedans may be losing the interest of U.S. consumers, but they are favored by shoppers in the crowded urban areas of Asia.
Sporty coupes, like subcompacts, find themselves getting Americans’ cold shoulders. The two-door Infiniti Q60 had U.S. deliveries nosedive 49 percent through June from a year earlier. Meanwhile, U.S. sales of the Nissan 370Z roadster tumbled 36 percent in the same period.
“That’s where the market is heading and Nissan covers it very well with a range that extends from the entry-level Kicks to the luxury Armada,” Fiorani said.
Like its industry peers, Electrification is in its plans.
Last year, the automaker outlined plans to launch eight new EVs to hit annual sales of 1 million electrified vehicles by 2022. The Maxima large sedan, for instance, could return as an EV, inspired by the IMs “elevated sports sedan” concept shown at the 2019 Detroit auto show.
