Nissan Supports Dealers to Sell New Cars Below 15% Invoice Cost, Targeting Inventory Shift

May 13, 2024 03:30 AM EDT

PHOTO OF WHITE NISSAN CAR — (Photo : PEXELS/Albin Berlin)

Nissan has introduced a new sales policy allowing dealers to sell vehicles at prices 10-15% lower than the invoice price. This marks a notable deviation from the standard manufacturer's suggested retail price (MSRP).

Nissan Cars for Sale at Under 15% Invoice Cost

Nissan has authorized dealers to offer current inventory at a discounted rate of 10-15% below the invoice price. The rationale behind this decision appears to stem from Nissan's excess of unsold vehicles at dealer locations. CarBuzz referenced a report from Automotive News regarding the presence of inventory at dealerships or in transit.

Only a few years ago, supply chain interruptions brought on by the COVID-19 outbreak made it difficult for retail stores, regardless of brand, to satisfy the huge demand for new cars. The situation has changed, though, as sales of electric vehicles have decreased across the board.

Nissan has come up with a strategy to boost sales, albeit at the expense of dealers. A leaked internal memo revealed that Nissan dealers are now authorized to offer the full MY2024 lineup at a discount of up to 10% below invoice, with the Armada model potentially marked down by 15%.

Dealers' Reactions

Moreover, additional details from Automotive News, as shared by CarBuzz, highlight that while this development is beneficial for consumers seeking discounted new cars, dealers are understandably disheartened.

Dealers are of the opinion that Nissan ought to raise incentive spending and ramp up marketing endeavors to enhance sales. According to information from Cox Automotive, as reported by the publication, Nissan had a 98-day supply of vehicles by the conclusion of March.

Additionally, according to CarBuzz, although certain dealerships are compelled to lower vehicle prices to remain competitive, others are implementing strategic approaches to maintain a competitive edge.

Multiple Nissan dealers expressed their strategy of attracting customers with affordable pricing on basic models with limited features and subsequently upselling them on higher trims equipped with desirable luxuries.

More Details about Nissan's Sales Strategy

Quartz shared that the arrival of 2025 model year vehicles, Nissan faces the challenge of accommodating them, necessitating a swift resolution to alleviate lot congestion. As per Automotive News, dealers are reportedly not enthusiastic about the proposed measures.

The report also stated Nissan likely aims to shield those costs from being recorded in its financial statements. The corporation unveiled its financial outcomes for 2023 today, revealing a substantial 51% surge in operating profit compared to the previous fiscal year of 2022.

Nissan aspires to sustain this growth trend throughout 2024; however, analysts forecast a decline in sales for the current year. This anticipated decrease in demand, coupled with the surplus supply from 2023, presents an opportune moment to secure a favorable deal on a new Z model.

Lastly, as reported by Quartz, Nissan's strategy to maintain its performance involves capitalizing on sales and transferring a portion of the expenses to dealers. While this approach may result in certain dealership owners being unable to acquire additional properties this year, their concessions will enhance the company's overall image.