In an unprecedented move, Nissan has advised its dealerships across the country to start selling cars at a loss. This strategy, aimed at reducing the mounting inventory of unsold cars, could revolutionize the way we perceive car sales amidst fluctuating market demands.
With the mean expense of buying a fresh automobile sitting around $47,000, the car industry has gone through a significant shift from a market that benefits sellers to one that benefits buyers greatly.
The restrictions on supply caused by the pandemic, which used to benefit car makers, have now decreased, revealing a surplus of new car inventory, particularly for Nissan, who reveals an excess of new vehicles that can last for almost 100 days.
Nissan’s strategy to address this issue includes incentivizing dealers to provide discounts of up to 10% on their 2024 range and even up to 15% on select models such as the second-gen Armada. This move, as detailed in a memo obtained by Automotive News, is motivated by the necessity to make space for the incoming 2025 lineup, which includes the new Kicks.
A source from a dealership remarked, ‘Over the last half-year, we’ve come to the realization that there’s no such thing as a bad bargain with Nissan. If someone is interested in purchasing a vehicle, you take a leap of faith and close the deal.’
However, not all models will be subject to these steep discounts. High-demand vehicles such as the GT-R or the $52,000 2024 Pathfinder Platinum are excluded, with dealers opting to focus on slow-selling models and less popular trim levels. This strategy not only demonstrates Nissan’s commitment to moving inventory but also underscores the challenges that the automotive market, particularly the EV sector, is beginning to face.
The dealership sentiment is mixed, with some expressing frustration over Nissan’s decision to place the onus of boosting sales on them. Despite this, dealers are finding creative ways to maximize profit through in-house financing and leveraging trade-ins, highlighting a nuanced understanding of market dynamics.
Nissan’s current issues with inventory are happening right after a strong showing in the first quarter, where sales increased by 8.5 percent.On the other hand, the rapidly rising number of fleet sales and the growing market day supply, which is currently at 135 days, almost twice the ideal level, indicate a worrying situation for Nissan’s market standing in the United States.
This strategy reflects a broader trend within the automotive industry where dealers and automakers are adapting to an ever-changing landscape. With Nissan’s market share in the U.S. continuing to decline, this aggressive discounting could be a much-needed catalyst for revitalizing sales and reducing inventory.
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 decision to sell cars at a loss is a bold move that reflects the complex challenges facing the automotive industry today. As dealerships embrace this strategy, it could herald a new era of car buying, where flexibility and aggressive discounting become key tools in balancing inventory with demand. For savvy buyers, this might just be the perfect time to drive home a new Nissan.
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