THE sudden departure of Nissan Australia chief, Richard Emery, was on the cards from the time that Carlos Ghosn lamented in an Australian press conference in June that he could not understand why the company’s market share in Australia was not on a par with its share in other major Western car markets.
Nissan’s US market share, for example, is 10 per cent whereas in Australia it languishes at around half that – five per cent.
But for Mr Ghosn to say so publicly was a barely-disguised rocket from on high for all those people who run Nissan Australia and especially for Mr Emery.
However, GoAutoNews Premium has been told that the rift between the Nissan-Renault-Mitsubishi supremo and Mr Emery goes deeper. It revolves around a fundamental difference of opinion about how Nissan can make money in this country.
Mr Emery has insisted that running the complete Nissan portfolio of models in Australia, while increasing sales and market share, cannot be profitable because of the nature of such crowded competition with 60-plus brands all running a complete range of entries into every segment imaginable.
Where once a market entry could get enough volume to justify the cost of bringing it into dealers’ showrooms, Australians have seen so many models up against each other fighting over an increasingly crowded patch that you are lucky today to get volumes of a 10th of what was possible a decade or so ago.
Carlos Ghosn
The view Mr Emery took from his corner office at the Dandenong headquarters was that the market for SUVs was growing and the market for passenger cars was declining. If you are making choices about what to include and what to discard then passenger cars are an obvious target – at least until Mr Emery felt Nissan had passenger cars to field that were more competitive.
That is why under his watch Nissan Australia no longer sells any passenger cars unless you count the 370Z and GT-R halo sportscars, which continue.
We have seen the end of the Micra due to looming Euro 5 emissions regulations, the Pulsar sedan and hatch (which replaced the Tiida debacle), the Altima and one SUV has also gone, the polarising Murano.
The Leaf is no longer in Nissan showrooms but is effectively on gardening leave and will return in late 2018 as a new-generation model.
The company has also discontinued the long-running stalwart, the Y61 Patrol, after 20 years on sale due to the same emissions requirements that killed the Micra, meaning it no longer fields a diesel engine in the new Patrol which is confined to run on a petrol V8 engine!
So, in addition to the sportscars and the Navara pick-up, which is just holding its own against the Ford Ranger, Toyota HiLux and Isuzu D-Max, the mainstream models available from Nissan dealers are the Pathfinder, X-Trail, Juke and Qashqai SUVs.
Stephen Lester
The thinking clearly is that rather than fighting the market battle on a wide front and spreading the marketing resources thinly, it is better to focus on the SUVs where the action is and put all the resources into the quartet of SUVs available in the Nissan stable.
GoAutoNews Premium has been told that, when Mr Ghosn was presented with this strategy for Down Under, he was far from pleased and saw the withdrawal of so many models as an affront to the company’s product strategists and to his supreme knowledge.
He wanted to know who signed off on it in Japan and why he was not told.
GoAutoNews Premium has been told that the newly-appointed CEO at Nissan Australia, Stephen Lester, who since April 2015 has served as managing director of Infiniti Canada, has been told that the company will run a full range of cars. This means that many discontinued models are likely to be reinstated and that he will also be expected to find a way of making money while he is about it.
As for Mr Ghosn’s comment that he could not understand why Nissan’s Australian share does not match other markets, perhaps a little look at what went on at Nissan Australia in the lead-up to Mr Emery’s appointment three and a half years ago would help.
There was much to be done. Mr Emery arrived at Nissan with the dealer network in turmoil with policies in place either deliberately, or by ignorance, designed to undermine the financial viability of the dealer group with impossible sales targets and ridiculous demands within changing dealer agreements.
Nissan Micra
Nissan even wanted to insert a poison pill into the dealer agreement that would mean the dealers could not sell their land to anyone but Nissan if they left the industry. Do you reckon the dealers were not worked up about that doozy?
They hired factory people who knew nothing of running car dealerships to liaise with the dealers and even set up a web blog where management told the reading public that car dealerships were on their way out and invited readers to (again publicly) ridicule their dealers.
The network lost focus on moving the cars, and those in charge at Nissan were so incapable of understanding what cars would sell in Australia and in what numbers the dealers could move them, that interim CEO Peter Jones and then Mr Emery were faced with clearing something like 40,000 cars that had not sold.
And then, of course, there were more cars on the way in numbers that bore no resemblance to what the market could absorb.
Nissan Pulsar
Mr Jones and Mr Emery had no choice but to cut their orders from Japan; never viewed as a popular move back home at head office.
The point is that Nissan Australia has been a mess and the public are understandably confused with models starting and stopping and massive discounts which just destroy brand loyalty and starve the business of the margins needed to support the brand.
Mr Emery certainly oversaw the clearance of the stock and even though Mr Ghosn might have been affronted that he thought it was not possible to field in Australia the entire product portfolio head office was expecting him to sell, at least he had a plan to make money within the unique disciplines placed on him by the crowded Australian market.
Just watch others running other brands set out to do what Mr Emery had in mind.
By John Mellor on 7th September 2017 Comment, Free Access Articles Comment, Emery, Ghosn, Nissan
Richard Emery
THE sudden departure of Nissan Australia chief, Richard Emery, was on the cards from the time that Carlos Ghosn lamented in an Australian press conference in June that he could not understand why the company’s market share in Australia was not on a par with its share in other major Western car markets.
Nissan’s US market share, for example, is 10 per cent whereas in Australia it languishes at around half that – five per cent.
But for Mr Ghosn to say so publicly was a barely-disguised rocket from on high for all those people who run Nissan Australia and especially for Mr Emery.
However, GoAutoNews Premium has been told that the rift between the Nissan-Renault-Mitsubishi supremo and Mr Emery goes deeper. It revolves around a fundamental difference of opinion about how Nissan can make money in this country.
Mr Emery has insisted that running the complete Nissan portfolio of models in Australia, while increasing sales and market share, cannot be profitable because of the nature of such crowded competition with 60-plus brands all running a complete range of entries into every segment imaginable.
Where once a market entry could get enough volume to justify the cost of bringing it into dealers’ showrooms, Australians have seen so many models up against each other fighting over an increasingly crowded patch that you are lucky today to get volumes of a 10th of what was possible a decade or so ago.
Carlos Ghosn
The view Mr Emery took from his corner office at the Dandenong headquarters was that the market for SUVs was growing and the market for passenger cars was declining. If you are making choices about what to include and what to discard then passenger cars are an obvious target – at least until Mr Emery felt Nissan had passenger cars to field that were more competitive.
That is why under his watch Nissan Australia no longer sells any passenger cars unless you count the 370Z and GT-R halo sportscars, which continue.
We have seen the end of the Micra due to looming Euro 5 emissions regulations, the Pulsar sedan and hatch (which replaced the Tiida debacle), the Altima and one SUV has also gone, the polarising Murano.
The Leaf is no longer in Nissan showrooms but is effectively on gardening leave and will return in late 2018 as a new-generation model.
The company has also discontinued the long-running stalwart, the Y61 Patrol, after 20 years on sale due to the same emissions requirements that killed the Micra, meaning it no longer fields a diesel engine in the new Patrol which is confined to run on a petrol V8 engine!
So, in addition to the sportscars and the Navara pick-up, which is just holding its own against the Ford Ranger, Toyota HiLux and Isuzu D-Max, the mainstream models available from Nissan dealers are the Pathfinder, X-Trail, Juke and Qashqai SUVs.
Stephen Lester
The thinking clearly is that rather than fighting the market battle on a wide front and spreading the marketing resources thinly, it is better to focus on the SUVs where the action is and put all the resources into the quartet of SUVs available in the Nissan stable.
GoAutoNews Premium has been told that, when Mr Ghosn was presented with this strategy for Down Under, he was far from pleased and saw the withdrawal of so many models as an affront to the company’s product strategists and to his supreme knowledge.
He wanted to know who signed off on it in Japan and why he was not told.
GoAutoNews Premium has been told that the newly-appointed CEO at Nissan Australia, Stephen Lester, who since April 2015 has served as managing director of Infiniti Canada, has been told that the company will run a full range of cars. This means that many discontinued models are likely to be reinstated and that he will also be expected to find a way of making money while he is about it.
As for Mr Ghosn’s comment that he could not understand why Nissan’s Australian share does not match other markets, perhaps a little look at what went on at Nissan Australia in the lead-up to Mr Emery’s appointment three and a half years ago would help.
There was much to be done. Mr Emery arrived at Nissan with the dealer network in turmoil with policies in place either deliberately, or by ignorance, designed to undermine the financial viability of the dealer group with impossible sales targets and ridiculous demands within changing dealer agreements.
Nissan Micra
Nissan even wanted to insert a poison pill into the dealer agreement that would mean the dealers could not sell their land to anyone but Nissan if they left the industry. Do you reckon the dealers were not worked up about that doozy?
They hired factory people who knew nothing of running car dealerships to liaise with the dealers and even set up a web blog where management told the reading public that car dealerships were on their way out and invited readers to (again publicly) ridicule their dealers.
The network lost focus on moving the cars, and those in charge at Nissan were so incapable of understanding what cars would sell in Australia and in what numbers the dealers could move them, that interim CEO Peter Jones and then Mr Emery were faced with clearing something like 40,000 cars that had not sold.
And then, of course, there were more cars on the way in numbers that bore no resemblance to what the market could absorb.
Nissan Pulsar
Mr Jones and Mr Emery had no choice but to cut their orders from Japan; never viewed as a popular move back home at head office.
The point is that Nissan Australia has been a mess and the public are understandably confused with models starting and stopping and massive discounts which just destroy brand loyalty and starve the business of the margins needed to support the brand.
Mr Emery certainly oversaw the clearance of the stock and even though Mr Ghosn might have been affronted that he thought it was not possible to field in Australia the entire product portfolio head office was expecting him to sell, at least he had a plan to make money within the unique disciplines placed on him by the crowded Australian market.
Just watch others running other brands set out to do what Mr Emery had in mind.
Comment by John Mellor
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