As recently as 1998, Nissan North America lost $580 million. Then in 1999, France's Renault bought a controlling stake in Nissan's Japanese parent and put in place a three-year turnaround plan. In March, Nissan Motor Co. announced a global net profit of $2.7 billion.
"Nissan is back," said Carlos Ghosn, CEO of Nissan Motor, noting that the company more than tripled consolidated operating profit for the fiscal year ended March 31. He said the marketer's debt load is its lowest in 15 years.
As for sales, however, the Nissan Division has a way to go. Through August, sales slipped by 8.8% to 420,257 units vs. 460,965 vehicles a year ago, according to Automotive News. But Nissan expects the new Altima to boost sales, with annual tallies for the car rising to 190,000 units vs. 136,971 sold last year.
Nissan Division launches the third generation of the car in October after a two-month teaser campaign. Omnicom Group's TBWA/Chiat/Day, Playa del Rey, Calif., handles the account.
The last generation of Altima, which debuted in 1997, flopped because it was too small for the midsize sedan segment in which it competed. Even so, the car was Nissan's best-selling model. With the new Altima, however, Mr. Sanfilippo said the carmaker has "a very, very strong entry," well positioned to go up against rivals Toyota Motor Corp.'s Toyota Camry and Honda Motor Co.'s Accord.
Bill Kirrane, VP-general manager of the division, said Nissan's Xterra sport utility, which bowed in 1999, was the catalyst for the brand's turnaround. He cited the brand's new and freshened vehicles and lower incentives. Three years ago, the Nissan brand was offering some of the industry's highest rebates-$2,000 cash back-plus, for a period in summer of 1998, cash-back coupons worth $500 in local newspapers.
But now, the marketer is less dependent on such tactics. Nissan's incentives in the first seven months of 2001 were only 82% of the competitors' average vs. 120% just a few years ago, said Jack Collins, VP-marketing and planning. Incentives "are a fact of life and we have them," he said, "but they're certainly less than a couple of years ago." In addition to Toyota and Honda, he named as competitors General Motors Corp. and Ford Motor Co.
Art Spinella, a VP of consultancy CNW Marketing/Research, said the average industry incentive in July was $2,469; in the first quarter of 2000, the industry's average incentive was $1,717.
The new Altima may also tempt those who are thinking about buying a car. CNW research showed only 3.9% of new-vehicle intenders had Nissan on their shopping lists in January 2000. That rose to 5.4% nine months later but fell to 4.9% last month-probably, Mr. Spinella said, because it was the end of the model year and Nissan didn't have any new products. "The whole market is down" this year, he added.
Nissan will address that with a slew of new or freshened models due in the next few years. Four new models are scheduled after Nissan opens its Mississippi plant in two years. For the 2002 model year, the Maxima gets some minor changes, but adds a six-cylinder version with added horsepower. Xterra will add a supercharged V6 model and the Frontier pickup adds a long bed and new interior. An all-new Sentra SE-R arrives with 175 horsepower and a new six-speed manual, and the return of the Z sportscar is due next spring.
Nissan is keeping the wraps on its new global brand positioning that Mr. Collins helped develop as a member of a global team beginning in 1999. Clearly, however, performance will be a key part of the positioning. The new Altima, with a category-busting 240 horsepower, is the first product to show off the new brand theme. "Internally we know what [the positioning] is," he said. But don't look for Nissan to announce it. "We want to reveal it through product," Mr. Collins said.
Jim Sanfilippo, exec VP of vehicle tester AMCI, said competitors will be watching closely. "[Carlos] Ghosn is probably writing the template for turnarounds right now," he said.