Nissan Gets a Marketing Makeover With Leaf

After Struggling With Anonymity, Japanese Automaker Is Using Electric Car to Build Its Brand

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NASHVILLE, Tenn. (AdAge.com) -- Last winter, when Nissan Motor Co.'s executive committee for the Americas gathered to discuss the future position of the Nissan brand, one marketing mission became clear: It needed a makeover.

Carlos Tavares
Carlos Tavares
The brand was stagnating in the market. Sales were inching forward, but new products just weren't catching fire.

Despite major recall issues, Toyota owned the quality space in the import segment, and the Prius was the industry darling in hybrids. Honda was cool, light and nimble and stayed stubbornly ahead with a reputation for fuel economy and reliability.

But Nissan?

After several years spent chasing pricing -- and even with an electric vehicle on the horizon -- the brand struggled in anonymity. It was just a generic Japanese brand.

Nissan's U.S. leaders are candid in their admission that theirs is a brand in search of itself.

"At our core," said Carlos Tavares, Nissan's leader for the Americas, "we didn't know what we stood for."

It is mid-October, and Mr. Tavares is seated across a long table in a conference room at Nissan's U.S. headquarters, 10 floors above southern Nashville's lush, rolling countryside.

To his left, Brian Carolin, Nissan North America's sales and marketing head, nods in agreement.

"I'm not advertising the Leaf to sell Leafs. We're sold out. I'm doing it to build the brand," Mr. Carolin said. "We are not regarded as a strong brand. Our mission in life is to improve that brand opinion."

As Nissan prepares to launch a moderately priced new global family car powered by a nonpolluting electric battery, Nissan will tout the zero-emission Leaf EV as a game-changer.

But its bigger mission is to redefine an entire brand that executives, in frank disclosures last week, say has lost its way against the competition.

Two non-Americans -- Mr. Tavares was born in Portugal, and Mr. Carolin is a Brit -- must use the unfamiliar car to change the way Americans think about Nissan, even those who have no intention of buying the Leaf.

Why the gap?
"Why are we so far from Toyota and Honda?" Mr. Tavares asked.

It's a fair question. Honda dealers sell 27% more cars and trucks than Nissan dealers in the United States, and Toyota dealers sell almost twice as many.

The answer Mr. Tavares hears from market research? "We don't know what you stand for," he said.

Indeed, despite its successes in sales, increased dealer profits, declining incentives and corporate profits, Nissan long has been perceived as a kind of flashy Japanese commodity brand.

Despite a flair for gutsy design and horsepower macho -- think of the edgy Cube and the racy GT-R -- the company is more commonly associated with its basic pickups and price-competitive Versas and Altimas.

Nissan's reputation, Mr. Tavares said, is simply too diffuse.

"That's exactly it. That's the core. Brian has been working on that for six months to a year," he said.

Mr. Carolin's solution is to use the Leaf to emblazon the brand's marketing message. "Potentially, it's a once-in-a-lifetime opportunity," he said of the chance to rebrand.

A national ad campaign that began last month is trumpeting product innovation as Nissan's identity. It reminds consumers -- even those who aren't planning to shop at a Nissan dealership -- that the brand is all about innovation.

The Leaf will go on sale in December, but initial inventories are modest. Nissan has been taking $99 sales reservations from interested buyers on the internet since April, hoping to reach 20,000 reservations in time for the start of sales. The company hit that number last month and immediately stopped taking holds.

While all those reservations will not necessarily translate into vehicle deliveries, 20,000 represents the entire allocation available to U.S. dealers for the next year.

Such a meager volume hardly seems like a big enough tool to build a brand, as Mr. Carolin said. But it might not strike the casual observer that Nissan is even in need of "building."

Nissan currently is the No. 5 brand in the United States, up from No. 6 a decade ago. Its Japanese parent company has been one of the industry's most profitable automakers for the past decade, after nearly going bankrupt in 1999.

Nissan's U.S. sales are having a party, up 15% in the first nine months of this year. Its cars -- for example, the 370Z Roadster and the new small Juke crossover -- routinely turn the heads of enthusiasts.

The brand has been picking up about a half-point of U.S. market share each year for the past few years. And 85% of Nissan's retailers are profitable -- up from 75% last year, after the worst auto slump in more than 30 years.

The Leaf's influence will be large. "It's a brand-builder," Mr. Tavares said of the car. "We want people to see us this way. We discovered that innovation has always been there in the products we did in the past. But we were never able to express it in a single way until now."

Nissan has been constructing factory operations in Europe, Asia and North America to produce the Leaf and its lithium ion battery pack. It is investing $1.8 billion on the vehicle in the United States alone, using a $1.4 billion low-interest loan from the U.S. Department of Energy to create assembly capacity for 150,000 Leafs a year southeast of Nashville in Smyrna, Tenn.

The reputation of Nissan CEO Carlos Ghosn is also riding on the car.

For two years, Mr. Ghosn has been prophesying that the world will embrace zero-emission cars as a practical driving solution.

In the face of criticism from competitors such as GM -- which plans to begin retailing an electric-gasoline hybrid car next month, the Chevrolet Volt -- Mr. Ghosn has insisted that consumers will buy a family car that can travel only 80 to 100 miles before its battery is dead. With a secondary gasoline engine, the Volt claims a range of more than 300 miles.

Warming the market
But Mr. Ghosn and his U.S. executives say battery range is not the only issue behind a Leaf purchase. They say many customers simply want to stop using gasoline -- for environmental, financial or political reasons. Besides, Mr. Tavares said, the average American drives fewer than 50 miles a day anyway.

To make sure the project unfolds smoothly, Nissan has been warming the market up to the electric car all year. Marketing personnel currently are escorting Leafs around the country on a 23-city tour to show the car to potential consumers and show them how easy it is to recharge the battery.

Project managers have been crisscrossing the U.S. and Canada to forge partnerships with municipalities, states and utility companies to create public charging networks and electric-friendly local ordinances.

In Nissan's U.S. corporate home state, Tennessee authorities and regional energy supplier TVA are planning to plant charging stations along three interstate highways in the coming month to support Nissan's drive.

Mr. Carolin acknowledged the enormity of the project. But he said the Leaf will bring other benefits to the brand.

One of them will be a boost in Nissan's acceptance among environmentally motivated consumers. That is a brand halo that has long been possessed by Toyota because of the pioneering Prius hybrid. Honda, with its fuel-efficient gasoline engines, also has been perceived as an environmentally friendly brand for decades. Smaller Japanese competitor Subaru also has been making inroads into the green market recently.

Mr. Carolin said the Leaf also will help make Nissan a more attractive franchise, even to auto dealers who currently do no business with the company.

Nissan has 30 to 35 open dealer points that it wants to fill, some of them in West Coast markets where consumers tend to consider themselves environmentally conscious.

San Francisco, one of the greenest of the green markets, currently has no Nissan dealership. Mr. Carolin vows that the electric car will help him plug that hole.

The Leaf also will boost Nissan's corporate fuel economy numbers. Although the company is still waiting for federal officials to issue rules on how to factor in vehicles that use no fossil fuel whatsoever, Mr. Carolin said he envisions that it will allow Nissan to boast improved fuel economy overall.

But in Nissan's new marketing equation, the Leaf will serve as the tangible proof of a bigger claim: that the brand is defined by innovation.

"It becomes the filter through which we will look at everything else we do in marketing," Mr. Carolin said. "There was a tendency in the past to focus on styling and performance. And people do value the styling of a Nissan relative to other Japanese products. But we think innovation has bigger legs. It's a point of differentiation from Toyota and Honda.

"For a long time, the gap between ourselves and Toyota was increasing. This year that gap is narrowing."

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This story originally appeared on Automotive News
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