In an unprecedented move that could reshape the car market, Nissan has instructed its dealerships nationwide to sell vehicles at a loss, a drastic measure designed to tackle a massive surplus of unsold cars amidst shifting market demands.
With the average price of a new car hovering around $47,000, the automotive industry is experiencing a significant transformation, moving from a seller’s market to one that offers substantial advantages to buyers.
The pandemic-induced supply chain constraints that once favored car manufacturers have eased, revealing a significant overstock of new vehicles, with Nissan notably having an inventory that could last nearly 100 days.
To address this growing challenge, Nissan is implementing a strategy detailed in a memo obtained by Automotive News, offering dealers incentives for discounts up to 10% on their 2024 models and even up to 15% on select vehicles like the second-generation Armada, all to make room for the upcoming 2025 lineup, including the new Kicks.
A dealership source shared their perspective, stating, ‘Over the last six months, we’ve learned that with Nissan, there are no bad deals. If a customer is keen on buying a car, we need to seize the opportunity and close the sale.’
However, this aggressive discounting won’t apply to all vehicles; high-demand models like the GT-R and the $52,000 2024 Pathfinder Platinum are excluded, as dealers will focus their efforts on moving slower-selling models and less popular trims, a strategy that highlights the broader challenges facing the auto market, especially in the EV sector.
Dealerships have mixed reactions, with some feeling the pressure of Nissan’s decision to place the burden of increasing sales on them, yet they are proactively finding innovative ways to maintain profitability through in-house financing and smart trade-in strategies, showcasing a deep understanding of market dynamics.
Nissan’s current inventory woes come shortly after a strong first quarter with an 8.5 percent sales increase, but a rapidly growing number of fleet sales and a market day supply at 135 days – nearly double the ideal level – signal a concerning trend for Nissan’s standing in the U.S. market.
This strategic shift by Nissan reflects a larger industry-wide adaptation to a rapidly evolving automotive landscape, where aggressive discounting might be the key to revitalizing sales and clearing inventory as Nissan’s U.S. market share continues to shrink.
For potential car buyers, this situation presents a rare opportunity to secure significant discounts, particularly on models that dealers are eager to move. While navigating these deals, it’s crucial for buyers to remain vigilant against potential upselling tactics or the inclusion of unnecessary add-ons that can inflate the final price.
Nissan’s bold decision to sell cars below cost is a stark indicator of the complex pressures within the automotive industry today; as dealerships adopt this approach, it could usher in a new era of car purchasing where flexibility and deep discounts are crucial for balancing inventory and consumer demand, potentially offering an opportune moment for buyers to acquire a new Nissan.
