Ambitious Nissan has big plans for the future

Nissan Canada is about to launch what the company says is an all-new 2012 Nissan Versa sedan with the lowest starting sticker price in Canada at $11,798. Call it the beginning of Nissan's big product push – something Canadian car buyers might want to take notice of, too.

Sure, the reinvented Versa may not have achieved the vaunted 40 miles per gallon standard so embraced in the United States these days (that would be 5.88 litres/100 km), yet with fuel economy rated at 6.0 litres/100 km and with a sticker price to boast about, the nicely packaged Versa looks like a player in the brutally competitive compact segment.

The new Versa rides on Nissan's all-new global V (for Versatile) platform and drivetrain. If you've been following the car business, you'll immediately start looking for other vehicles for Nissan to spin off the V. You'd be correct to do so.

A redesigned Versa hatchback is expected early next year as a 2013 model. In addition, Nissan dealers, according to just-auto.com, may also get two new subcompact models, or B-segment cars in car company-speak. Both would be spun off the flexible V. The talk is of a small car and a small multipurpose rig, trade journal Automotive News adds.

Nissan has said it will spend $400-million (U.S.) to put these two little cars into production at the same plant in Mexico. Nissan's story is that these two are for the "Americas."

Whether Canada and the U.S. will be part of the Americas destined to get these two remains to be seen. But such a decision would make sense. Ford's new Fiesta subcompact is selling well, a new Hyundai Accent looks strong, also, and those are just two of the newer B-cars out there for buyers who want fuel efficiency for less than $15,000 – a lot less, in fact.

Indeed, Nissan wants more fuel-efficient offerings and it wants them built closer to the markets where they will be sold.

You might say, then, that the fall of 2011 is the start of something very big at Nissan. Various sources from Automotive News to Merrill Lynch to Edmunds.com say Nissan will update most of its vehicles in the next 18 months. The timing couldn't be better for Canada.

True, Nissan brand sales are up 4.8 per cent on the year, which looks good compared to Honda (down 12.4 per cent through the end of July) and Toyota (off 15.9 per cent). On the other hand, Kia's sales are up 22.8 per cent this year, Hyundai is up 10.5 per cent and that's only part of the story.

Competitors such as Chrysler (up 13.2 per cent), Ford (the No. 1 car company in the country with sales up 4.8 per cent) and Volkswagen (up 17.6 per cent) are all making strong showings in segments where Nissan has traditionally been strong. Indeed, to keep sales robust, Nissan Canada resorted to an Employee Pricing promotion this summer, an unusual move for an established and profitable Japanese auto maker.

What Nissan and every other auto maker would prefer to do is sell vehicles on their merits, rather than using discounting to push them off dealer lots. That's the essence, in fact, of CEO Carlos Ghosn's latest business plan unveiled in June.

Dubbed "Power 88," the plan calls for Nissan to grab an 8 per cent global market by the end of 2016 (up from 5.8 per cent globally now and 4.8 per cent in Canada for the Nissan brand). The other "8" in Power 88 is the company's intention to achieve a corporate operating profit of 8 per cent.

Nissan plans to deliver one new model every six weeks, on average and, under its "Innovation" branding strategy, introduce an average of 15 new technologies a year for a total of 90 between now and 2016. Electric vehicles like the Leaf going on sale in Canada this year for $38,395 (not including rebates of $8,500 and $8,000, respectively in Ontario and Quebec)? By 2016 Nissan wants to sell a total of 1.5 million EVs – with its Renault alliance partner selling an additional 1.5 million. Oh, and the Infiniti lineup will grow to 10 models from seven.

Nissan plans to do all this while reducing costs an average of 5 per cent a year. In a nutshell, then, Ghosn says Nissan will sell dramatically more technologically advanced and innovative vehicles, expand model offerings, shift production here and there to meet local demand and cut costs dramatically. Ambitious? No kidding.

Nissan Canada clearly expects the Power 88 plan to improve sales here. That's why as part of the initiative, Nissan Canada expects to add dealers going forward.

"Simply put, if we want to sell more cars and meet our global growth target of 8.0 per cent of market share we will need to provide our customers with improved choice through additional retail locations," Nissan Canada president Allen Childs said last week, adding that Canadians "can expect to hear a lot more from Nissan in the very near future."

One particular area where Canadians would like better news from Nissan is on quality. The J.D. Power and Associates 2011 Initial Quality Study released in June had Nissan ranked No. 24 and that was a drop from No. 15 in 2010. The IQS is a look at owner-reported problems during the first 90 days.

More telling is Power's Vehicle Dependability Study. It looks at a 12-month running tally of owner-reported problems in three-year-old vehicles. This year, Nissan was ranked No. 25 in the VDS, while the Infiniti luxury brand was No. 14 – both below-average rankings.

So quality is one of Power 88's six pillars. Nissans says it wants its quality to rank with the best of the global auto makers.

"Nissan Power 88 is the road map for our company's profitable growth," said Ghosn in unveiling the plan. "We will accelerate our growth, bringing more innovation and excitement to our products and services as well as cleaner, more affordable cars for everyone around the world, in line with the energy and environmental challenges of the 21st century."

Not to be overlooked is Nissan's push into new market segments. For instance, the new NV commercial van puts Nissan in this business in North America for the very first time – even though Nissan already sells 700,000 commercial vehicles around the world each year.

Nissan is also getting into the taxicab business. The company won the contract as New York City's "Taxi of Tomorrow" with a recent deal to supply its new NV200 to replace New York's aging fleet of Ford Crown Victorias and a hodge-podge of other models. By 2016, Nissan expects to be the world's leading light commercial vehicle maker.

Infiniti also has room to expand – plenty, in fact. The Power 88 plan is aiming to see Infiniti grow from 2010 sales of 150,000 vehicles to something in the neighbourhood of 500,000 vehicles a year, or 10 per cent of the global luxury market.

Infiniti Canada will be taxed to hold up its end of the plan. Infiniti has just 0.4 per cent of the Canadian vehicle market and, because of various supply issues, sales so far this year are down 19.1 per cent.

At a June news conference in Japan, Ghosn was quoted by The Wall Street Journal: "We are definitely on the offensive. This is the first plan we are starting without a handicap."

That is, Nissan now is solidly profitable, carries manageable debt, is pushing the technology envelope with vehicles such as the Leaf, and around the world has a solid foundation of vehicles, platforms and plants.

And to think that just a dozen years ago Nissan was essentially bankrupt, saved from a government rescue, a break-up or even extinction by an alliance with France's Renault. That partnership included a cash injection and brought with it a new Nissan boss, Carlos Ghosn.

Back then I remember my first interview with the newly appointed Ghosn. He was at the time a relatively unknown Renault executive with a history of running Michelin tire's North American operations. His smart, no-nonsense approach was a revelation. He even vowed to quit if Nissan didn't make the numbers he was putting out as a way to grade the company's progress.

Nissan and Ghosn hit the targets and have since. For consumers in Canada, that means we're going to see plenty of new Nissan and Infinitis, not to mention a wave of new technologies.