If one automaker is currently operating as a shell of its former self, it would be the once formidable Japanese automaker Nissan (NSANY) .
Originally sold under the name Datsun in the United States, Nissan once offered stateside buyers cars that closely matched the quality of well-known domestic rivals like Toyota (TM) and Honda (HMC) .
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Over the years, Nissan models like the Z sports car, the Hardbody pickup truck, and its successor, the Frontier, along with other well-known models, have been familiar sights on highways and in driveways across the country.
But despite its storied past, Nissan lags behind its rivals and is in a situation that is leaving its dealers wondering about the future, not only for the automaker but also for their bottom lines.
In early November Nissan CEO Makoto Uchida noted that the automaker needed to undertake some bold restructuring in order to get out of what he called an "extremely tough situation."
In addition to some adjustments that reduced its full-year sales and operating outlooks, it embarked on a mission to save $3 billion from its costs by reducing its workforce, slashing a significant part of its production capacity, and selling a sizable share in domestic rival Mitsubishi.
During the news conference announcing these changes, Uchida said he would take a 50% pay cut, but that it is up to the company to dig itself out of its current rut.
“The question is how to do it fast and adapt to reality,” Uchida said. “We cannot deny the fact that our sales plan was overstretched given the rapid changes in markets.”
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U.S. dealers smell danger
One indication of Uchida's worries can be symbolized by Nissan's performance in one of its key competitive markets: the United States.
According to a report by Automotive News, the average profitability of Nissan's U.S. dealers is at its lowest level in nearly 15 years. According to its research, Nissan's U.S. market share is at its lowest level in the last five years, sitting at 5.6%, a 1.9 percentage point drop within the period.
Additionally, data reported by Nissan indicates that it is not the same company it used to be, as it struggles with new car sales.
In 2023, the latest full-year data available, Nissan sold just 834,097 units across its entire lineup of cars, trucks and SUVs in the United States. In 2013, Nissan sold 1,131,965 vehicles, a roughly 26% drop within 10 years.
"In many markets, Nissan dealers are, at best, selling half the volume that competing Honda, Toyota, Subaru and Hyundai stores are selling," a dealer told AutoNews. "If you're not selling enough new cars, you're not generating enough trade-ins, which feed profit centers such as finance, service and parts."
Related: Nissan execs sound the alarm on an increasingly dire situation
Cries and whispers of more dire news affecting the automaker only add to the list of fears that its dealers currently face.
In a recent report, unnamed senior officials associated with Nissan told the Financial Times that the automaker is beginning to exist on borrowed time while it seeks an anchor investor to help it exist as a car company through to next year.
“We have 12 or 14 months to survive,” the senior official told FT. "This is going to be tough. And in the end, we need Japan and the US to be generating cash."
According to AutoNews, Nissan Americas Chairperson Jeremie Papin sent a memo to dealers in the United States on November 30 asking for "patience and understanding" as they navigate this difficult period.
"We are working diligently to implement turnaround actions and the stability and future value they will bring to valued business partners like you is a high priority for us," Papin said in the message. "We are working hard to deliver more details on these action plans. In the meantime, we ask for your patience and understanding."
Related: Nissan's latest tech takes on a problem every driver faces
Without going into much detail, Papin's message added that the automaker will focus on some key business tenets within the next few months.
"We recognize the actions designed to increase product competitiveness, the core of our business, are highly important to bring Nissan back on the growth track."
U.S. Nissan dealers told the publication that there is a significant concern about Nissan's long-term business plans within the community. One dealer noted that the note "did nothing to address the speculation and apparent financial difficulties Nissan is facing."
"This shows to me a complete lack of vision and understanding of the marketplace at a time when they were highly profitable and selling every vehicle they were building," the dealer said.
Nissan
Nissan says opportunity lies ahead
In the memo, Papin noted that Nissan is actively working to support its existing lineup in a "very competitive marketplace," while also making efforts to invest and modernize the lineup "to maximize market opportunities and value for our business partners."
One opportunity it missed was with hybrid-electric vehicles. While rivals Toyota and Honda thrive on hybrid versions of popular models like the Camry and CR-V, Nissan currently does not sell any hybrids in its U.S. lineup.
Within the next three years, Nissan expects to introduce three electrified variants of its bestselling Rogue crossover to its U.S. lineup, including a plug-in hybrid, a traditional hybrid similar to the Toyota RAV4 Hybrid and Honda's CR-V hybrid, plus an extended-range model.
The Nissan Motor Company trades on OTC markets in the United States as NSANY and on the Tokyo Stock Exchange under the ticker number 7201.
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