Automotive News Europe - December 2019 - 7

AUTOMOTIVE NEWS EUROPE

COVER STORY

much for the crossover as the Volkswagen Golf, which has historically sold for
a premium in Europe.

Nissan says that its grow-at-all-costs
strategy is from a very different time.
"We have been undergoing a significant
transition for the last one-and-a-half to
two years," de Ficchy told Automotive
News Europe. De Ficchy, the former
head of the Renault-owned RCI Banque,
replaced Willcox at the beginning of
2018 with the job of returning Nissan
to profit and looking ahead to the age
of electrification.

The success of the Qashqai, which was designed in Europe and built at Sunderland,
helped Nissan to make a 1 billion euro profit in Europe during its 2007 financial year.
Now in its second generation, the Qashqai
was Europe's best-selling compact crossover last year in a sector that has grown to
nearly 2 million units a year.
In 2010, Nissan used the same formula
that made Qashqai a success with the
Juke, which transformed the niche small
crossover segment into a powerhouse
with more than 2 million sales a year. Also
in 2010 Nissan launched the Leaf batterypowered compact, which has topped Europe's electric vehicle sector nearly every
year since. Like the Juke and Qashqai, the
Leaf is built in Sunderland.

Lineup laggards
Outside of these models, however,
Nissan has failed to find its feet. The
second-generation Note small minivan, hurt by a wider decline in Europe's
minivan sector, was axed in 2017 after
just four years. The Pulsar's disastrous
four-year run in the compact hatchback
segment ended in 2018 after the car
failed to reach even half the company's
predicted annual sales of 64,000. The
fifth-generation Micra small hatchback, launched in 2017, is struggling
in a competitive sector and was down
19 percent in the first nine months of
the year at sales of just under 37,000,
according to JATO Dynamics.
Nissan's decision to localize Infiniti output in Europe was perhaps its lowest
point. The premium brand was launched
in the region in 2008 and failed to gain
traction against dominant premium rivals from Germany. Hoping to reverse
that, Nissan negotiated with Daimler to
use its Mercedes-Benz GLA platform and
systems as the basis for an SUV-inspired
premium compact to be built in Sunderland starting in 2016. Ambitious production targets of 60,000 for the Q30 and
higher-riding QX30 were set, but never
reached. In its best year, 2016, the entire Infiniti brand only managed 13,515
sales in Europe, according JATO. Nissan
pulled the plug on Infiniti in Europe earlier this year.

We have been undergoing
a significant transition.
-- Nissan Europe Chairman
Gianluca de Ficchy

become biggest automaker in the world.
If that's your principle, you will chase
volume at the expense of margin," said
LMC's Kelly.
Starting in 2011, Nissan's goal in Europe
was to surpass Toyota to become the
region's top-selling Asian automaker by
2016. "The objective was a rallying call
for the company - we needed to grow. At
the time we were below 3 percent market
share and we needed at least 4 percent in
a very competitive market," Paul Willcox,
Nissan Europe's former chairman, told
Automotive News Europe in 2016. Doing
so would allow Nissan to invest in product, he said. It was classic Ghosn strategy, resulting in cars such as the Pulsar
and Infiniti Q30. Now Nissan Europe has
a 2.5 percent market share while Toyota
Europe's is more than double that.

DECEMBER 2019

Nissan is still losing money, but that was
to be expected, de Ficchy said. "During
a transition phase you reduce your volumes, resulting in a lack of synchronization between your revenue stream and
your costs," he said.

Plant problems
To address that, Nissan is slimming its
footprint. As part of a 12,500-person
global headcount reduction Nissan will
cut up to 800 jobs at the Barcelona and
Sunderland plants. Between 600 and 700
of those are going at Barcelona, which
is in flux after the Pulsar was axed last
year and the combustion-engine NV200
compact van was discontinued earlier
this year. That leaves the e-NV200 electric van and three pickups - the Nissan

SERIOUS SLIDE
Nissan Europe's sales, excluding Russia, have fallen sharply since peaking in 2016
Sales

700,000

683,008
651,829
637,259

600,000
582,000
552,000

Relentless desire
Many of these decisions can be attributed to Ghosn's relentless desire to grow
at all costs. "One of Ghosn's aims was to

Rather than boosting sales, Nissan is
now willing to accept a smaller share as
long as it's making money. As a result,
it has reduced its exposure to unprofitable channels such as rentals and other
bulk fleet deals. It has also cut self-registrations by around 100,000 since 2017,
de Ficchy said. "Most automakers have
been continuously pushing into channels such as rentals or fleets," he said. "I
think the value of the brand is something
we have to preserve for the future."

503,000
500,000

2011

Source: Nissan

2012

536,090

511,000

2013

2014

2015

2016

2017

2018

All figures from fiscal year that starts April 1 and ends March 31

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Automotive News Europe - December 2019

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