Nissan is doing less badly

Nissan - which will close its fiscal year in March 2021 - presented its third quarter results (Oct. Nov. Dec. 2020). Although the results for the first nine months are clearly negative, the improvement over the last quarter is clear. It is essentially due to the effort put on the "quality of sales", particularly in North America. Although not very exciting, this rationalisation effort was necessary and is being carried out quite effectively. This leads one to hope that, for Nissan first and for the Alliance second, the more offensive parts of the plans that the allies have equipped themselves with can quickly take precedence over the very defensive part that still prevails.
 The press conference that accompanied the presentation of Nissan's results for the penultimate quarter (Q3) of the financial year 2020-2021 involved the duo Makoto Uchida (CEO) - Ashwani Gupta (COO) and left the observers with the impression that After two years of crisis (far from the Lebanese vociferations of Carlos Ghosn who this summer mocked the lamentable results of the two companies and the negligence of their leaders), the company is managed and able to keep the commitments it has attached to its Nissan Next plan.
 For the moment, at Nissan as at Renault, the first thing is the return to profitability and this is quite obviously translated by a strong propensity to let volumes slip away in order to be able to show a clearly improved "quality of sales". Thus, over the last nine months of 2020 (corresponding to the first three quarters of Nissan's accounting year), Nissan estimates the evolution of worldwide sales at -16.2% (from 65 to 55 million) and assumes a variation of its own sales of -23.4% (from 3.7 to 2.78 million).
The difference (and therefore the loss of market share) is small in China (-9.7% vs. -9.1%). It is more than 5 points in Japan (-17.3% vs. -12%), 7.5 points in Europe (-28.9% vs. -21.4%) and more than 17 points in North America (-34% vs. -16.8%).
Over the last quarter, global sales recovered (by 2.1%) but Nissan's sales continued to fall (by 9.6%) in Europe and North America in particular.
North America remains the "big file" for Nissan since, in 2019, the United States and Canada still accounted for a large 1/3 of Nissan's sales volumes and for the last 15 years, most of the profits were linked to it before this profitability collapsed after 2015.
In 2020, sales in China become more important than sales in North America: in the first nine months of 2019, Nissan sold 1.28 million vehicles in North America and 1.09 million in China; in 2020, the equivalent figures are 845,000 and 985,000 and A respectively. Gupta had to devote a good deal of its energy to trying to convince that this very significant drop in volumes and market share was healthy, intended and destined to be corrected once the quality of sales had been restored. 
From this point of view, the COO can show, in Q3, four indicators of sales quality that are clearly green in North America when compared with the same three months of 2019: sales per vehicle sold are up 5%; dealer inventories have fallen from 143 to 88 days (-27%); aid per vehicle has fallen by 2 points; and fleet sales in the mix have fallen by 12 points.
The new Rogue launched at the end of the year would embody the new virtuous dynamic that Nissan's managers hope will be established in 2021: sales in dealerships (excluding fleet sales) of Rogue (old model) were below 30,000 over the first three months of 2020; they are above 40,000 over the last three months while, over the same three months, sales prices have increased by 22%.
 If the entire American range enters into this dynamic, the quality of sales will cease to be harmful to the volumes sold and market shares and North America will once again become for Nissan the cash cow it was. This has been the explicit goal for some time now. The new Pathfinder and Frontier are expected to follow in the footsteps of the new Rogue.
 An allusion to the new Qashqai in Europe suggests that Europe could follow the same path, but the assertion has remained rather timid and wait and see seems to prevail. China and Sylphy's performance there in improving its market share while resisting better than the competition to the sharp drop in transaction prices would be more in line with the Next plan.
This Next plan is essentially presented as a rationalisation plan and the few references to decarbonation and/or electrification objectives have very little weight compared to the two obsessions of sales quality on the one hand and cost optimisation on the other.
The first objective is operationalized through the turnover per vehicle (up 1.7% in Q3) which is itself associated with the drop in sales to rental companies (-6 points in the mix), the drop in total stocks i.e. of Nissan and its dealers (-25%) and the drop in subsidies (-0.7 points). As for the latter, its achievement is referred to the reductions in fixed costs (down 12% in Q3), which are themselves subdivided into four items: manufacturing (-9%); design and R&D (-8%); overheads (-9%); marketing and sales (-27%).
This last indicator indicates that "sales quality" is, if not the alpha and omega, at least the heart of Nissan's management for the past months as well as for the months to come. The constant reaffirmation of this priority seems to end up bearing fruit and, from this point of view, the third quarter is marked by an operating result which becomes positive again (of 27.1 billion yens) after having been -153.9 billion yens in Q1 and -4.8 billion yens in Q2.
Compared to what the said result had been one year before the improvement is notorious since, in Q3 2019, the result was only 22.7 billion yen: if this is the case, it is because the very unfavourable effects of exchange rate variations and - above all - of the volumes sold were more than compensated by the improvement in the quality of sales and the reductions in fixed costs.
Even if, for 2020 - and for Nissan's financial year 2020-2021 - this will not result in a positive net result and will imply that Nissan will still contribute negatively to Renault's results, Nissan is indeed recovering and is therefore partly supported by the Alliance.
If this were to be confirmed, and Renault and Nissan should, in 2021, return to profits and begin to seriously look at the part of their plans which is a little more offensive and which is, for a few months to come, left well behind.


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