The Versa sedan is inexpensive, which means it’s not making Nissan or its dealers a lot of money at a time when the tiny, budget sedan segment is almost non-existent. Nissan also offers the Sentra, lest we forget. That’s one too many small sedans.
You may not have noticed it in the marketplace, but Nissan is in the midst of a five-alarm crisis at the moment and plans to shed at least 12,500 jobs around the globe. The automaker has been in a slow-burning financial slump for the past year, but it has now evolved into a crisis that appears to have accelerated wildly just in the past three months.
The roots of the crisis are complex, but at its core Nissan pursued a strategy of volume first for much of the past decade under Carlos Ghosn. The strategy worked well when demand boomed during the economic recovery, but in the past two years it’s led to high operating costs, excess production capacity, and low per-unit profits in addition to a much lower operating profit margin than its competitors. For example, during 2018, Toyota’s operating profit margin was over 8 percent, while Nissan’s was 4 percent. Halfway through 2019 it is now 0.1 percent, according to the recent quarterly results made public days ago.
The last three months have been particularly damaging for Nissan globally: net income shrank by 99 percent in the period of April to June 2019, and revenue dropped by another 13 percent, according to Automotive News Europe. During this short time period, Nissan’s global volume also shrunk by 6.0 percent. All of this happened basically in a matter of months.
In a drive to reduce its production volume and footprint, Nissan now plans to cut 9 percent of its global workforce, and shrink its 60-vehicle lineup across Nissan, Infiniti and Datsun brands by 10 percent. Once a chaser of volume in the U.S., Nissan currently has a number of models that could be cut from the lineup to reorient the company.
Here are 8 models, listed in no particular order, that Nissan, Infiniti and Datsun could probably get by without as the automaker moves to cut costs.
1. Nissan Versa sedan
The Versa range is one of the main players in the very small and very inexpensive segment, but the Versa sedan, like the Mitsubishi Mirage sedan, isn’t doing anything for the brand other than serving as a rental fleet model that isn’t generating cash for the company. It’s also very old at this point, and dealers are basically chasing loose coins selling it. Nissan still has the Sentra, after all, for a small sedan.
2. Infiniti QX30
Despite sharing a platform with the Mercedes-Benz GLA-Class, the small Infiniti SUV has seen only modest success during its tenure, as market sales have shifted toward larger vehicles. The QX30 may have made sense five years ago when the GLA-Class debuted, but its price, interior space and packaging has not endeared it to buyers in that time.
3. Infiniti QX60
The QX60 has been around since 2013 and was formerly known as the JX35 — that’s how old it is at this point. Ideally, Infiniti should have one midsize SUV instead of two, but with the QX50 being all-new this year it isn’t likely to be cut right away — the massive QX80 can cater to those needing maximum interior room if Nissan chooses to axe the QX60.
4. Nissan Maxima
The Maxima has been around for almost five years at this point, and arrived just as the sports sedan segment was starting to shrink quite a bit. The Maxima offers a plush interior and some very premium options to those willing to pay for them, but it has had to battle other Japanese sedans for sales this whole time while their sales have also shrunk. Ideally, Nissan can keep the Altima, priced $10,000 lower than the Maxima, and choose not to play in an ever-shrinking segment.
5. Nissan 370Z
The 370Z coupe and roadster are about a decade old at this point, and their sales aren’t exactly keeping Nissan dealers afloat. The 370Z was basically on its way out, but if the current financial climate at Nissan persists, it will be difficult to create a replacement from scratch. This means the nameplate is likely to go on hiatus.
6. Nissan Pathfinder
The Pathfinder is priced identically to the smaller Murano (yes, really), but it has the disadvantage of having been in production since 2012. That makes it feel about 20 years old. Ideally, Nissan should have redesigned this model (to not feature a CVT, among other things) years ago, but it had not committed the funds to redesign it. The result is that it feels very old in the marketplace. Will Nissan now have the money to redesign this model, or is it more prudent to just rely on the Murano, which does not have three-row capability? That’s a tough position to be in, but the Pathfinder will have to be replaced or cut soon in any eventuality.
7. Nissan NV200
Nissan’s small NV200, which has been around since the early part of the decade, sells about 18,000 units per year in the U.S. Those numbers are nothing to write home about, and as most are fleet sales they’re not the models keeping the lights on for dealers. Nissan still has the larger NV Cargo model for commercial sales, which at least does a lot more business with plumbers and electricians.
8. Datsun on-DO
The on-DO is one of the oldest models in Datsun’s lineup, having debuted in 2014 in a number of overseas markets, and it’s now being upstaged by Datsun’s pocket-sized crossovers as consumer tastes have shifted. As the rest of the lineup is composed of hatchback bodystyles, it may be difficult to justify the on-DO without either redesigning it soon or cutting it from the lineup.
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