Nissan had one of the most iconic cars ever made in history but over the last 20 years, they lost their charm, the quality of their cars has dropped and they have lost their core audience. In 2019 they lost over 99% of their profit and had to lay off about 13,000 employees. In the 80s Nissan spent a lot of money on improving their cars, but for most of the 90s, they didn’t make any profit. When you are not making a profit, it’s hard to innovate. As they were going through a huge loss and were on the verge of bankruptcy, they entered into an alliance with Renault who offered to take on $5.4 billion of Nissan’s debt, in exchange for a 36% stake in the company. Here are top 4 reasons why the failed.
1: Cost-cutting
As Nissan was spending 25-25% more on parts than their competitors, they decided to cut production cost by installing cheaper parts in their cars. This makes sense from a business perspective but this didn’t work so well because they were installing cheaper parts in car’s engine which led to things like degradation of guides and tensioner which kept the timing belt in place, as they were made out of plastic and had to be replaced at regular intervals. CVT transmission failure was also a major issue in their cars. These problems occurred after the car’s warranty ran out after 96,560Kms(60,000 miles), because of this Nissan had to extend the warranty to 1,61,000Kms(1,00,000 miles).
2: Lack of Quality
Because of the cost-cutting, Nissan cars felt cheap, less refined, less reliable and less enjoyable. Because of these problems, the sales figures of their cars were affected very badly. But cost-cutting and reducing the manpower helped Nissan get out of debts.
3: Soullessness
In order to make more money, In the early 2000s, Nissan started making small and pocket-friendly cars as they are in high demand, the sales figures improved tho because of these entry-level cars but not much because of the problems mentioned above. As they were making entry-level cars and not more sports cars, the company lost its soul and core audience who loved their old iconic cars.
4: Sports cars were not updated
Nissan's most fun and the most enthusiast based models haven’t been updated frequently enough. For Example- Nissan 370Z is on sale since 2002 but it has not been given any major update since then, and even the Nissan’s most flagship car the GT-R hasn’t got any major update since 2007.
How to make a comeback- To make a comeback Nissan has to make their cars more reliable and this can happen by improving the quality of their car parts, There is a reason why Nissan’s from the 80s and 90s are loved by almost all of the enthusiasts.
