Leaving Comfort Zone to be More Innovative, EmotiveSat, 09/01/2018 - 12:16
Q: What main factors have allowed Nissan and other Japanese companies to gain a strong foothold in Mexico?
A: Japanese companies have found Mexico to be a strategic partner and a second home. Though Japanese by origin, Nissan is a Mexican competitor with over 53 years in the market. Quality is another factor that has given Nissan an additional advantage over competitors.
Nissan vehicles are synonymous of quality, durability and reliability and that has been one of our main differentiators to established as sales leader in the country for nine consecutive years. That being said, we are now expanding this mindset by giving innovation and emotion much bigger roles in our corporate image and products. We are present in most market segments and each of our vehicles, from March to Kicks to GT-R, offers its own version of technology, innovation and emotion along with quality and reliability.
Q: What is the “wow” factor that will ensure the brand’s continued growth?
A: Our strategy of innovation and emotion has been a continuous process that started with the launch of GT-R and Nissan Motorsports (NISMO). We have also made advances beyond our high-performance segment, including the development of the hybrid version of X-Trail launched in 2017 and the second generation of our full-electric LEAF model launched in the end of summer 2018. We are renewing our entire lineup and we also have new releases. Murano, for example, was officially launched on June 18, 2018. This model will crown and complement our SUV lineup, which is the sector with the most dynamic development in the country.
Q: Considering that the SUV segment is the only growing segment domestically, how have your priorities shifted regarding SUV and compact vehicle production?
A: Beyond betting on a specific segment, what we want is to offer different mobility options through innovation and technology. Although the SUV segment is growing, Mexico is a compact-vehicle market and Versa is the best-selling model in the industry. In terms of pure volume, the 37 percent growth in the SUV segment is still small compared to the size of the compact segment. I do not think this will change in the short term; both segments are complementary and we will continue to offer innovative proposals for compacts and SUVs.
Q: What have been Nissan’s strategies to maintain its leadership in the market after a slight decrease in market share?
A: We ended 2017 with a 23.4 percent market share and we could not be more pleased. We remain the market leader with a difference of 7 points of market share, or more than 100,000 units, against our closest competitor. The year, however, was very different from what we had experienced after nine years of continuous growth for the industry, sometimes in the double-digit range.
The market is reaching a stabilization period and the challenge for Nissan was greater after halting production of Tsuru, which was a representative model and sales leader for the brand in Mexico for over 30 years. Tsuru gave much to Nissan and to Mexico and we ended its production after 2.4 million units sold. We also announced Tiida’s exit from the market, so it was no surprise to see a decrease in market share. This was a necessary step to take the company to the next level and to implement the concept of Nissan Intelligent Mobility, our vision toward a zero-emissions and zero-accidents future. Tsuru fulfilled its purpose and now we are betting on new models such as GT-R, Murano and X-Trail in its hybrid version, as well as special editions such as Kicks Dark Light, a commemorative edition that reflects our sponsorship with the Star Wars franchise.
Q: How have you recaptured those clients who preferred and bought the Tsuru model?
A: We tried to offer more affordable versions of our entry models to attract customers that would normally go for a Tsuru. We released Drive versions of Nissan Versa and other models, supported by an aggressive financing strategy and comprehensive marketing plans so clients could understand the benefits of acquiring these models. We had a very good response and the only reason we could not supply as many Versas is because we could not produce more. Mexican clients appreciate our quality values, so we did not have to convince them to switch their preference. They trust our products and we are thankful for their loyalty and preference.
We have worked to improve our customer experience in terms of sales and aftersales services, which has been a key point in maintaining Nissan as sales leader for nine consecutive years, supported by a strong financing offering and local production. Our ultimate goal is to remain leaders in the market and the preferred option for the Mexican consumer. We want to innovate the sales experience we offer at our dealerships through the newly implemented NREDI 2.1 standard, an image that offers an experience of innovation, technology and a more open and amicable approach for our customers. We started the implementation of NREDI in the southeast region and we expect to cover the more than 230 dealerships we have in Mexico in the next two years.
Q: What are your expectations for the development of the domestic market considering the recent contraction in light-vehicle sales?
A: The domestic market grew to almost twice its size since 2009. Since then, the industry grew nonstop and it is natural to reach a peak. This is not a crisis, only an adjustment, and competition will only make us stronger as a country. The industry will continue adjusting until it reaches its optimal point although the government should keep offering incentives to strengthen the market further. From our side, we are fully committed to working with the government to make the country the automotive powerhouse it should be. The industry might not grow in the short term, especially considering the challenges related to an election year, but it can maintain its current levels.
I still believe that the market can reach the 2 million-unit goal, considering the size of the population. However, economic development is a must for this to happen, as well as strong regulation over used-vehicle imports.
Q: How are you facing the competition of new arrivals from Korea and China?
A: The arrival of more competitors has forced us to improve our technology and deliver more quickly on our promise of innovation and emotion. New brands will arrive with new products and they will naturally grow until they reach their stabilization point. Nissan has more than 53 years in the market; we have watched every brand arrive and we understand that we must work to retain our position in the market.
Q: How is Nissan facing the changes in demand in the international market and how is that impacting your operations in Mexico?
A: Our main export market is the US. That being said, Nissan is the brand that produces the most for the domestic market with 40 percent of our production destined for local sale. We cannot deny that we have seen a contraction in the US market, particularly in certain segments, but we will keep sending the vehicles that the country demands. At the same time, we have the opportunity to export our production to many more countries in South America, Europe and even the Middle East. If the US market keeps slowing down, we will seek growth opportunities in the rest of the world. Nissan Mexicana has exported its vehicles to 50 countries; we are a flexible company and Mexico can offer us the trade backbone to support this level of diversification.
Q: What can local companies do to participate in Japanese manufacturing chains?
A: There are still many opportunities for suppliers to collaborate in Nissan’s production processes. Even in raw material supply including plastics, steel and aluminum, there is an opportunity as long as the government offers the proper incentives for local companies to grow their operations and boost their quality. We understand that localized sourcing leads to much more competitive costs and an easier distribution process and we are in a constant search to localize our supplier network. There have been cases in which companies have not been able to meet our quality requirements. Nevertheless, we believe that with the right incentives and support, supplier companies can grow their participation in the global industry.
Q: How will electrification impact Mexico’s manufacturing operations and how is Nissan adapting its Mexican processes in favor of this new trend?
A: Rather than impact, the industry will see evolution. Electrification is inevitable and we are already making the leap toward these technologies with the introduction of the X-Trail Hybrid and the second generation of the Nissan LEAF. Change will come gradually, not only to Mexico but to the global industry. Today, we manufacture eight different engines at Aguascalientes and in the future, we may also include electric or hybrid variations. Although this still has not happened and we have not made clear plans to modify our production, we think the moment will come when it will be unavoidable.