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Nissan doubles down on emerging markets as U.S. sales slow

Stock MarketsJun 13, 2018 06:10AM ET
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© Reuters. FILE PHOTO: Logo of the Nissan Motor Co. is displayed at the 44th Tokyo Motor Show in Tokyo, Japan

YOKOHAMA (Reuters) - Nissan Motor Co Ltd (T:7201) said on Wednesday it expects vehicle sales in some markets to beat industry growth, driven by countries including Saudi Arabia - crucial for the Japanese firm that is struggling with slowing sales in the United States.

Nissan, Japan's second-largest automaker, focused on the United States for the past few years, and roughly doubled car sales there since 2010, as it aimed to corner a 10 percent share of the market.

But that ambition came at a cost: hefty discounting led to the company's North American operating profit falling by nearly a third in the year just ended.

Nissan is now looking to China, the world's biggest car market, and other regions such as the ones it clubs as Africa, Middle East and India, to boost growth while trying to improve profitability in North America.

Moreover, the company is entering new markets including Pakistan and Turkey and plans to expand its affordable Datsun brand, Peyman Kargar, chairman of Nissan's operations in Africa, Middle East and India, told reporters at a briefing to discuss the company's mid-term strategy.

"Today we have 3.7 percent market share (in the region). The industry sees a 40 percent rise in total sales volumes, and we are going to be much above the market trend," said Kargar.

"We're talking about big growth in the region," he said, declining to give detailed regional sales targets.

He expects overall industry sales to climb to 12.1 million units in 2022 from 8.8 million in 2017.

Kargar, who joined Nissan last year from automaking partner Renault SA (PA:RENA) where he led sales and marketing for the same region, added that he expected to double market share in Saudi Arabia to 14 percent in 2022, from 7 percent last year when roughly 800,000 vehicles were sold in the country.

Kargar said Nissan is also betting on more Nissan-branded sport utility vehicles (SUVs) and cheaper Datsun-branded cars to shore up sales in India, where it is struggling to expand and is far behind market leader Maruti Suzuki India Ltd (NS:MRTI). It has focused on selling more SUVs in India, where SUV sales are fast climbing, fueled by rising consumer spending power.

It also expects to raise its market share in South Africa to "more than 15 percent" by 2022, from 10 percent in 2017, Kargar said, by selling fewer pick-up trucks and more passenger cars.

Nissan doubles down on emerging markets as U.S. sales slow
 

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