Nissan helping out the big boys

[txchamps]

Does anybody else see this strategy as being wrong-headed, as well as creating an unfair competitive environment? I can think of a dozen ways this can backfire on Nissan.

https://www.google.com/url?rct=j&sa=t&u ... AqN0hMlKdA

[MinisterofDOOM]

I've always found the Dealer/Manufacturer relationship to be bizarre and risky. They're both at odds with each-other, but also each with the consumer. Generally a thing that benefits either the Dealer or the Manufacturer does not benefit the other. As a consumer, I despise it, but as a dealership operator I'm sure it would be a whole different level of hatred. And as a manufacturer I'd have a hard time leaving the customer service persona of my entire brand to franchised third-parties whose own interests are not aligned with my brand's. I can see how it began that way, but modern dealerships make little sense to me, functionally. They're not fully indirect retail sales like toothbrushes at Walmart, but it's also not direct in-house like, say Apple products. You get this weird blend of the worst of both and none of the good of either. Which is why I watch the Tesla direct sales legal proceedings with great interest.

To the point, having said all that, I think I see why Nissan is doing it. But I agree it's a bad idea. I'm sure this will improve relations with "preferred dealers" but it's only going to further antagonize the rest.

Another thought:
Infiniti dealers are FAR too uncommon. I can think of two within 100 miles of me, and I'm not even sure there was ONE within twice that distance when I was in Idaho. I'd much rather see this come from Infiniti as a measure to flesh out official service networks than as a means to plop YET MORE Nissan dealerships selling the same 6 CVT having turdmobiles onto the map. I can't swing a dead cat without hitting an Altima on a dealer lot, but when I wanted my Infiniti serviced with a real Consult, I'd have to drive half an hour. Dumb as s***. These aren't Ferrari's. They're family sedans. Get with it.

[themadscientist]

If Nissan really wants to grow market share, quit building boring cars. GT-R sales aren't going to help you much.

[txchamps]

Infiniti dealers are FAR too uncommon. I can think of two within 100 miles of me, and I'm not even sure there was ONE within twice that distance when I was in Idaho. I'd much rather see this come from Infiniti as a measure to flesh out official service networks than as a means to plop YET MORE Nissan dealerships selling the same 6 CVT having turdmobiles onto the map. I can't swing a dead cat without hitting an Altima on a dealer lot, but when I wanted my Infiniti serviced with a real Consult, I'd have to drive half an hour. Dumb as s***. These aren't Ferrari's. They're family sedans. Get with it.

Man, that's an oddity, isn't it? In San Antonio, there is just one dealer -- in a city of 1.3 million people. Next closest dealer is 90 miles away in Austin, then Corpus, then Houston with 4. I'm sure this adds to the air of exclusivity, but you're right -- they're not THAT special.

According to one source I read, 58% of purchases are through lease. Now THAT'S something that will surely bite dealers in the arse.

[txchamps]

Let's try to figure out Nissan's thinking here -- if there is any of that going on. Dealer A is in a large market area, say DFW, while dealer B is in the sticks -- let's say Victoria or Beaumont. Dealer A's volume is 3 times dealer B's. But let's just say that dealer B turns his inventory over every 2 months on average, with an above average margin (very common in small market areas, BTW), while A has average turnover of 4 months -- a month below industry average, and his margins are well below invoice. By Nissans thinking, dealer A is going to get preferred treatment purely because of volume, and not because he runs his business well.

Dealer A will now have the opportunity, because of Nissan's largesse, to open up a dealership in or near dealer B's territory, becasue he has a track record of high volume sales. Nissan will eschew dealer B, and support dealer A.

Take his to it's logical conclusion. Dealer A will continue its aggressive pricing strategy wherever it goes -- it's a winning formula. Nissan continues to back A's expansion and growth at the expense of all the small but (up until then) healthy dealer B's accross the region. Now we have a bunch of high-volume but low-margin dealers dominating the landscape. The market turns south just a little bit, and we have a recipe for disaster. Dealer A suddenly cannot meet its mortgate payments (they are over-extended in their real estate portfolio). They are on the brink of bankruptcy, which is terrible for Nissan, because that will leave them with a region with no dealers. What will they do?

That is just one of dozens of scenarios I can envision where this strategy can lead .