This Is Why Nissan May Never Recover In The American Market

Nissan has been in a difficult spot for a while, but recently the automaker’s problems are even more pronounced. There are two key, but intertwined factors that are holding Nissan back, and I’m not sure any kind of investment or change in company direction can overcome them.

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While most pundits will point to lackluster product offerings as the explanation for Nissan’s downfall, the competitiveness, or lack thereof, of the brand’s respective models only tells part of the story. The larger issues at play are poor product perception and a sub-par retail experience, and these two things feed into each other.

Let’s start with the product, when is the last time you saw a Nissan model and had the reaction of “I’d like to buy that”? Being that this is an enthusiast site, I can wager it was the Nissan iDX sports coupe that never got made, and likely never will get made. Before that, it was probably the GT-R that came out in 2008, a niche-market enthusiast car with a retail price starting at around $70,000. The Nissan Z had potential, but it was just a retro-re-skin of the already ancient 370Z.

The problem is that while Nissan makes products that practically fill every segment from sub-compact cars, to pickups, a large variety of crossovers and even a few EVs, for most mainstream buyers the brand is not at the forefront of their conciseness. As a professional car shopper who has brokered thousands of deals over twelve years, there have been fewer than a dozen times when a client requested a Nissan.

By and large, car buyers perceive Nissan as a cheaper or low-market brand. Similar to how Hyundai and Kia were perceived in the late ’90s and early 2000s, customers bought those cars because the standard imports like Honda and Toyota were too expensive. Even though corporate may not come right out and admit that buyers don’t see Nissan as on-par with other Japanese carmakers, Nissan’s pricing strategy of heavy rebates and discounts is a tacit admission that a “cheaper” car is the only way they can really compete. Naturally, this feeds back into the perception that Nissan’s cars aren’t as good and therefore should be less expensive than the rest of the field. Despite being the more “budget oriented” brand, Nissan killed its most affordable car the Versa in addition to the popular Altima.

This vicious cycle of pricing and perception is somewhat responsible for the next problem, which revolves around the dealer experience. Even though I don’t get a lot of requests for new Nissans, I have had a number of interactions with the brand’s various dealers in the pre-owned sphere and I have found that, for the most part, the dealer network is overall resistant to providing a straight forward and hassle-free car buying experience. There are certainly good Nissan dealers just as there are plenty of bad apples representing other brands, but the sheer volume of shady Nissan stores is higher than average compared to similar imports. The automaker briefly toyed with the idea of an “online buying” portal, but essentially failed in the execution.

Unfortunately, the mode of operations can partly be explained by the type of customer that buys a Nissan. If this brand is not the primary choice, it then becomes the fall-back for buyers with a combination of bad credit and or/lack of education when it comes to car buying, this result of this is a target customer that is easy to take advantage of. If the bulk of the customers coming into the showroom are easily ripped off, those dealers are going to fall into a behavioral pattern of old-school “stealership” tactics to close a deal.

Hyundai and Kia faced similar challenges as they attempted to overhaul their brands, and while both automakers still have a dealer network that is less than ideal, the interactions are improving albeit slowly. However, the advantage that the Korean brands have going for them is a shift in perspective, most buyers don’t perceive a Sonata or a Sorento as the “cheap” option over a Camry or Pilot, it’s just different.

Furthermore, Hyundai and Kia have fully embraced the shift to electrification and have fielded desirable products. Even though Nissan was early to the EV market with the Leaf, an objectively good car for its time, the automaker let it sit on the vine too long like its other products. The Ayria on paper should have worked, it’s mid-size crossover with a respectable range, but it’s a car that I keep forgetting even exists. I also suspect there is limited overlap between the typical Nissan buyer, and someone who has easy access to charging at their residence.

Nissan is facing an uphill battle that is going to take both a massive investment in products and a serious overhaul of their retail network if the brand doesn’t want to end up like Mitsubishi. It can’t continue to rely on a customer base that doesn’t want to buy their products but rather has to buy their products.

Tom McParland is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Got a car buying question? Send it to Tom@AutomatchConsulting.com