Yahoo Autos Nissan gives dealers permission to advertise vehicles below invoice price
Remember when we recently wrote about Nissan rolling out a new Murano and Armada this year, plus a Rogue Rock Creek trim, to continue product turnaround? Unnamed dealers attending the meeting and speaking to Automotive News afterward said they were heartened by the looks of the product. A more immediate issue some of them had, however, was what to do with today's glut of inventory. Cox Automotive reports Nissan dealers are sitting on at least three months of stock at current sales rates, more than 30% above the national average and more than any other full-line OEM selling in the U.S. According to a new report in AutoNews, Nissan's latest indulgence to dealers is: You can advertise prices below invoice. A dealer memo AN saw tells storefronts they can promote prices that are 10% below invoice for any 2024 vehicle other than the Armada, which can be reduced to 15% below invoice. Notice, this isn't about being able to sell below invoice, this is about advertising prices below invoice. An automaker can't tell a dealer not to go below a certain price (nor above), but the carmaker can put restrictions on how its products are advertised.
That's good news for buyers who get a better look at potential savings without visiting a showroom, assuming dealers begin taking advantage of the new freedom. Dealers, however, have two complaints. The first is that selling below invoice means dealers pay for the price cuts, not Nissan. Dealers want incentives and rebates, which come out of Nissan's pocket, but Nissan doesn't want to return to the era of giving away cash to sell cars — even if that's a dealer incentive that a customer might never know about, and so not associate with an automaker overtly eager to flog product. The era before the pandemic when Nissan let its models get stale devastated brand equity, while a simultaneous dependence on rebates to hit sales numbers and please dealers tortured the balance sheet. For now, even with better product, the company wants to avoid repeating that two-step. March 2024 ended Nissan's 2023 financial year with mainly positive numbers: Sales up almost 20% for the financial year, quarterly sales (Q4 of the 2023 FY, Q1 of the 2024 calendar year) up nearly 13% in all regions bar China. A small decrease in quarterly profit, less than 5%, would be the number sticking in Nissan's craw.
CEO Makoto Uchida wants to growth "step by step with a balanced product portfolio and by implementing optimal business strategies.” New marketing initiatives are part of the business strategies, it's possible Nissan wants to see how better advertising gooses sales before resorting to old ways. During its end-of-quarter analyst call, the automaker said it expects the U.S. to be a big part of the profit-growth puzzle for the 2024 financial year as China-market sales take a dip. Harder to make that work if Nissan's paying for incentive and rebate programs, which can run into the hundreds of millions.
