Nissan Expects Sales Bump

August Sales Steamy for Toyota, GM by Joseph Szczesny (9/4/2006)
Ford and Chrysler drop, along with Honda and Nissan.

The alliance between Nissan and Renault has strengthened the Japanese automaker's hand in the North American market, according to Nissan's new senior vice president for administration and finance.

Dominique Thormann, who was part of the 17-member team from Renault that Carlos Ghosn took with him to Japan in 1999 to help plot Nissan's revival, also predicted that Nissan' sales in North America will turn around in the next couple of months.

However, Thormann, who works out of Nissan's new headquarters inNashville, waved off suggestions that he had been sent to the U.S. to run Nissan's North American operations. While he heads up several sensitive functions including finance, planning and forecasting, Nissan's operations in the America's continue to be run by a committee made up of five senior vice presidents, including the Farmington Hills-based vice president of engineering.

Ghosn personally chairs the executive committee for the Americas, he added.

The Nissan turnaround should pick up momentum during fourth quarter as the company rolls out more of its new vehicles, Thormann told a group of reporters in Detroit.

The recent drop in Nissan sales in the U.S. was not unexpected, he added. Nissan sales in the U.S. are down 6.6 percent in the eight months of 2006. "If you looked at our cycle plan going back to 2000, you would see we always expected a dip," said Thormann, who also insisted that the company was on track to meet the goals laid out by Carlos Ghosn's 2007 "Value Up" plan.

The new Sentra, Altima, and new Infinitis will reverse the slide, he said. The new subcompact Versa, the first new model released by Nissan in more than 15 months, is already sold out, he said. The Versa's success has made Nissan more confident that the Sentra and Altima will quickly attract American consumers, he added.

Moreover, Nissan's task is made easier because both the Sentra and the Altima already have credibility with American consumers, Thormann said.

Thormann conceded the company’s full-size pickup trucks and sport-utility vehicles have not been big hits. Nissan's big trucks were fighting for credibility even as gasoline prices began to rise, which undercut the sales efforts of all manufacturers in the segment, Thormann said. Consequently sales have been softer than expected.

Nissan still has a relatively small presence in both the European and North American market and it has to scramble to get into the spotlight, Thormann argued. Nissan's European subsidiary unveiled its new small crossover vehicle, the Qashqai, ahead of the Paris Auto Show where it would have been overshadowed by vehicles from other manufacturers.

The new Qashqai underscores the advantages of the Renault-Nissan alliance, since it's based on a platform first designed by Renault. Nissan has adapted the original platform to suit its own needs. The Versa also started life as a Renault platform that was modified by Nissan for the U.S. markets, Thormann said.

Thormann, who worked at Nissan of Europe before moving to the U.S. in July, declined to comment on ongoing talks between Renault-Nissan and General Motors. The talks are supposed to be finished in mid-October, he noted. However, Thormann said Renault-Nissan alliance is certainly flexible enough to accommodate another partner.

The key to the alliance between Renault and Nissan is its flexibility and its transparency, which allows each partner access to the others plans and technology, he said. "It's not a merger and under Mr. Ghosn's watch that will never happen. The alliance is sort of virtual and well adapted to both companies," he said.

In addition, the Renault-Nissan alliance is built on some basic premises including respect for the identity of each company. "Nissan's people understand they make the decisions about Nissan. Decisions about Nissan are never made in Paris and vice versa. That will never change," he said. However, Thormann also said cross-ownership is not an absolute requirement for an alliance.

Underlying the current alliance, though, is the cross-ownership of stock in both companies. Renault now own 44 percent of Nissan shares and Nissan owns about one third of Renault's stock.

Both companies also are always looking for synergy or ways to cooperate, Thormann said. The ideas, however, don't come from a central planning staff but are allowed to "bubble up" from within the organization, Thormann said.

"There are also cross-company teams that work on specific projects," he said.

For example, Nissan initially missed the shift to diesel engines in Europe in the late 1990s. However, it was able to borrow and re-engineer two small Renault engines to fit into its products, he said.

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