Nissan Motor Co.

Published on .

Most Popular
Nissan Motor Co. was founded June 1, 1934, when Jidosha-Seizo Kabushiki-Kaisha (Automobile Manufacturing Co.) took over the automobile manufacturing division of Tobata Casting Co. The company's automobile brand, Datsun, had been manufactured by a variety of predecessors since 1914.

Nissan stayed close to its homeland during its first decades of existence, as did most Japanese automakers. The economic depression of the 1930s, paired with Japan's military buildup leading into World War II, meant vehicle production was often diverted for military contracts. In addition, the primitive state of Japanese roads impaired domestic vehicle sales.

Nissan decided to sell its vehicles in the U.S. in early 1958. The automaker entered the U.S. market when most Americans still thought of Japan as a source of cheaply made goods.

Positioned as "second vehicle"

In the U.S., Nissan set out to position itself as a provider of the "second vehicle" to American households; first, however, it had to overcome engineering problems with its sedan. Despite stepping up its compression ratio to wring more acceleration from its 37-horsepower engine, Nissan's vehicle still lacked the power to keep pace on U.S. highways. In addition, its poorly insulated engine compartment guaranteed a toasty environment for driver and passenger, and its small battery meant owners in colder climates struggled to start their vehicles on winter mornings.

In 1958, its first year in the U.S., Nissan sold 83 Datsuns, well below its target of 500 vehicles a month. The following year, sales reached only 1,300.

In addition to its sedan, Nissan also offered a compact pickup truck, which was a first for the U.S. market. Relatively strong initial sales of its pickup gave Nissan sufficient momentum to keep it afloat until it could develop and introduce other models.

In addition to its American buyers, Nissan found Japanese gardeners in Los Angeles were eager to buy of its pickup. They had been introduced to the truck by Yutaka Katayama, a 25-year Nissan veteran who, in 1960 when the automaker formally incorporated on American shores, was VP of Nissan's western U.S. division. (Western U.S. division sales were routinely double those in the eastern states during the automaker's first years of U.S. operations.)

Nissan's U.S. division's first advertising efforts were handled by the Tokyo-based Standard Advertising News Agency, but in 1961 the division hired little-known Los Angeles agency Parker Advertising to handle its ad spending, estimated at only $50,000 a year.

In 1962, Nissan and Parker introduced the Patrol, a new four-wheel-drive vehicle. A year later, agency founder John Parker convinced cowboy star Roy Rogers to act as spokesman for the Patrol, for which he received compensation of one Patrol and two pickup trucks. Though the Patrol sold just 2,616 units in the U.S., it remained in the Datsun product line for eight years and was Nissan's longest-lived U.S. model in the 1960s.

Nissan enjoyed more success with its Fair Lady 1500 and 1600 series of convertible sports cars. They boasted larger engines and were more in line with American tastes. In early print campaigns, the convertibles were put in drawings suggesting they were in racing competitions, accompanied by the line "World's most exciting sports car buy." More than 42,000 Fair Lady cars were sold in the U.S. during the 1960s.

Although Nissan's U.S. operations turned a profit in 1964 and Datsun was among the top 10 import car makes by 1965, U.S. sales were still less than 20,000 a year and represented barely 2% of the import market share. Mr. Katayama, who by then had been named president of the U.S. division, was certain his unit would go no further without a larger engine and sportier design for its sedans.

In 1968, when the 510 sedan reached the U.S., Mr. Katayama got just such a car. The 510 was a first for a Japanese sedan, boasting an overhead cam 1,600-cc engine generating 96 horsepower, four-wheel independent suspension and a decidedly sporty look. Priced at around $1,800, it was not much more expensive than Nissan's first U.S sedan had been a decade earlier and cost less than half its nearest competitor, the BMW 1600.

Mr. Katayama personally created the introductory TV spot for the 510, which featured a beautiful woman driving the sedan in the rain through the hills of California's picturesque Big Sur peninsula, the car's windshield wipers clicking to the strains of Vivaldi. There was no voice-over.

According to a Nissan ad executive, the 510 itself was a revolution, "a Yuppie car before the Yuppies had been properly identified." Datsun's 1968 sales were more than triple what they had been three years before, and about 300,000 510s were sold over the following five years.

Datsun had a second hit just a year later with its redesigned Fair Lady sports car, which was restyled as a grand touring coupe with a 2,400-cc, 150-horsepower engine. The U.S. division rebranded the Fair Lady cars as they arrived in port, selling them instead as the 240Z, Nissan's internal designation for the vehicle. The 240Z sold nearly 120,000 units in four years, and Datsun's 1970 U.S. vehicle sales topped 150.

More sophisticated campaigns

As Datsun became more popular, its advertising spending ballooned, approaching $45 million by the late 1970s. Campaigns also became more sophisticated, edging away from the regional fare of its early years. In 1971, Datsun cosponsored the Glen Campbell Los Angeles Open race, garnering the automaker its first major exposure on network TV.

In 1973, the Arab oil embargo-imposed on the U.S. for its support of Israel in a war that October- depressed U.S. car production by more than 25%. Buyers scrambled to find more economical models, and the first-ever mileage tests conducted by the Department of Transportation concluded that Nissan's 1200 model was the most fuel-efficient car in the country, at 33 miles per gallon.

Mr. Katayama sent a camera crew to film the 1200 crossing the country; during that trip, it reached 40 miles per gallon. The resulting commercial and slogan-"Datsun saves"-were synonymous with the brand for the rest of the decade. By 1975, Datsun was the leading U.S. auto importer.

But ironically, the success of the U.S. division resulted in Mr. Katayama's recall to Tokyo. The home office could no longer ignore the U.S. division's remarkable growth, and its scrutiny did not bode well for Mr. Katayama. The very un-Japanese executive, whose unorthodox methods had left him with no political capital within the company, was "retired." He was also unceremoniously returned to Japan.

Under new management in 1977, Nissan dropped Parker Advertising primarily because its lucrative, informal contract rankled Nissan's conservative Tokyo executives. After a lengthy search, the carmaker moved its account to William Esty & Co. (Parker closed shortly after Nissan's exit.)

Soon after its move to Esty, the automaker replaced the Datsun name in the U.S. with Nissan; research, however, showed that 90% of American consumers did not recognize the Nissan name. As a result, most ad campaigns in the first half of the 1980s included both the Datsun and Nissan names.

Though the ad campaign for the Nissan Sentra—an economy car that premiered in 1982 to strong sales—worked well, the rebranding caused problems. Esty's early campaigns also focused on the engineering of Datsun cars rather than the vehicles themselves, which made for difficulty in establishing a strong brand identity.

Moreover, the changeover forced Nissan to spend ad money gaining consumer name recognition at a time when rival Japanese automakers were spending in support of their new, noneconomy-car cars in the U.S. Their improved engineering quality allowed Nissan's competitors to gain obvious advantages over their American counterparts as well as Nissan.

Consumers proved willing to pay a premium over sticker prices for established marques, such as Toyota and Honda. But Nissan, struggling to remake itself in the image envisioned by its parent in Tokyo, missed its opportunity to evolve into a premium automaker in the eyes of American consumers, even though its products were just as good as its competitors.

While its vehicle sales topped 500,000 a year by the mid-1980s, Nissan was relegated to the second-tier of import automakers, a market that quickly became crowded, as Mitsubishi, Daihatsu, Isuzu, Suzuki and Hyundai entered the U.S. market.

Chiat/Day

Despite more than quadrupling its ad spending over budgets in the previous decade, Nissan's U.S. market share dropped from 5.2% in 1985 to 4.8% in 1986. Nissan, looking for a change, dropped Esty in 1987 in favor of Chiat/Day, Los Angeles.

Chiat/Day's first campaign, "Built for the Human Race," premiered to heavy criticism. Early spots were shot using shaky cameras and centered on actors playing Nissan engineers who all but patted themselves on the back. The vehicles themselves were given relatively short shrift. When 1988 vehicle sales dropped more than 15% from 1987, the campaign was retooled.

In November 1989, Nissan introduced Infiniti, a luxury marque to compete with Toyota's Lexus division, and Hill, Holliday, Connors, Cosmopulos of Marina del Rey, Calif., won Infiniti's $60 million account. Hill, Holliday's first Infiniti commercials focused on Zen-like nature shots that featured an abundance of trees and rocks, with the cars conspicuous by their absence. Lexus, meanwhile, was building a following. By the first quarter of 1990, Lexus sales were nearly triple those of Infiniti, and again Nissan asked for the campaign to be revamped.

In 1996, Nissan took another stab at regaining lost market share with the "Enjoy the Ride" campaign. The central figure in all the spots was an elderly, somewhat mystical Japanese man and his dog. Known as "Mr. K," the figure was meant to elicit the long-departed Mr. Katayama, who was little known outside Nissan by that time. One celebrated commercial from the campaign featured Barbie and G.I. Joe lookalike dolls tooling around in a toy roadster to promote the 300ZX. Although Chiat/Day won several awards for the campaign, dealers grumbled that the spot was not selling cars and it, too, was eventually changed.

In 1999, reeling under a debt load of more than $20 billion, Nissan took a nearly unprecedented step, selling a 36% stake in its global operations to French automaker Renault SA. By 2001, Renault increased its stake to 44%.

In 2001, Nissan Motor Co. had worldwide earnings of $2.98 billion, down 0.6% from the year earlier, on sales of $49.63 billion, down 10.1%. It ranked as the No. 40 U.S. advertiser, with total spending of $774.7 million, down 4.8% over 2000. TBWA/Chiat/Day handled both its Nissan and Infiniti divisions.

The agency introduced "Shift" as the new tagline for Nissan and "Accelerating the future" for Infiniti. Then, thanks to a slew of stylish new and redone models, the automaker demonstrated one of the U.S. industry’s most stunning turnarounds, increasing both vhicle sales and profits.

In 2003, the company had worldwide earnings of $4.4 billion, up 9.7% from the previous year. It ranked No. 19 among U.S. advertisers with total spending of $1.3 billion, up 34.6% from 2002, according to Advertising Age.

In this article: