Analyzing Nissan’s strong growth trajectory

From 34,952 vehicles sold in 2018 to 42,694 units by year-end 2019—how does Nissan Philippines, Inc. do it?

As early as the first quarter of 2018, Nissan began its strong growth trajectory despite the industry-wide slowdown caused by the Tax Reform for Acceleration and Inclusion (TRAIN) law that imposed a higher excise tax on new car sales.

Because of TRAIN, which took effect on Jan. 1, 2018, plus a soaring inflation rate, six out of the Top 10 Sales Performers lost market share with the exception of Mitsubishi, Hyundai, Nissan and Suzuki.

Nissan bucked the downward trend in Q1 2018 with 5,783 vehicles sold, rising from seventh place in Q1 2017 (5,277 units sold) to replace Isuzu (3,795 units sold) at sixth.

NPI’s market share in Q1 2018 accordingly rose to 6.3 percent compared to Q1 2017’s 5.3 percent.

By the first half year-to-date of 2018, NPI had increased its market share from 5.2 percent in the first semester of 2017 to 7.3 percent with total vehicle sales of 13,222 compared to the same year-ago period of 10,651.

LEAPFROGGED. In the process, NPI leapfrogged over Honda Cars PH, Inc. and Ford Motor Co. PH, Inc. to grab fourth place and was threatening third placer Hyundai Asia Resources, Inc. (HARI) whose sales had declined from 17,366 units in the first sem of 2017 to 15,957 in the first half of 2018.

With HARI’s sales dropping, only NPI, Suzuki PH, Inc. and Foton Motor PH, Inc. gained in sales in the first half of 2018. In other words, seven out of the Top 10, including undisputed market leader Toyota Motor PH Corp., saw their sales dwindle.

Fast forward to October 2018, when the 7th Philippine International Motor Show (PIMS) opened and the two major industry organizations, the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Association of Vehicle Importers and Distributors (AVID), released their respective year-to-date (YTD) January to September 2018 third quarter sales reports.

The 2018 CAMPI and AVID sales 3Q sales reports both reflected a continuous drop in total vehicle sales. CAMPI’s 3Q YTD sales slid from 12.5 percent less in the first half to 13.8 percent less, while AVID’s went down to 13.0 percent less from 11 percent in the first semester.

Again in the third quarter as in the first half of 2018, Nissan, Suzuki and Foton posted positive growth to retain their respective rankings in the Top 10.

NIPPING AT THE HEELS. In 3Q, NPI sold 24,507 vehicles compared to 17,365 in the same year-ago period, and thus kept fourth place while nipping at the heels of third placer HARI, which sustained a 6 percent decline in sales from 27,451 in the year-ago period to 25,440 in 3Q 2018.

Only 933 unit sales stood between HARI and NPI for the coveted third place in the Top 10.

Nissan continued its relentless climb in sales by fielding a combination of popular models in three segments and entering a fourth segment (midsize SUV) with the Terra.

In 3Q 2018, the Navarra, NPI’s best-selling model, vaulted to first place in the Top 5 Pickup Trucks list with 13,565 unit sales, beating longtime leader Toyota Hilux by 871 units.

The Urvan (5,267 units sold), while selling less units than the Toyota Hiace, outsold the Hyundai Starex by over 2,600 units while the Almera (4,501 units sold ) ranked fourth in the Top 5 Subcompact Sedans list in 3Q 2018.

YEAR-END 2018. Fast forward again, this time to the January-December 2018 year-end CAMPI and AVID sales reports. The industry’s total vehicle sales added up to 382,361 units, a 16 percent drop compared to year-end 2017’s 448,107.

At the close of 2018, HARI was hanging on to third place in the Top 10 by selling 35,401 units for 9.3 percent market share, while NPI retained the fourth spot with 34,952 unit sales for 9.2 percent market share, a difference of 449 units.

But by the first half of 2019, Nissan had overtaken Hyundai by selling 21,060 vehicles for 11.3 percent market share while HARI sold 17,654 units for 9.5 percent market share.

CAMPI’s number crunchers, without taking into account AVID’s sales data, noted that NPI scored an amazing 59.3 percent leap in sales in the first sem of 2019 versus the same year-ago period when NPI sold 13,222 units.

NPI thus widened its lead over HARI for third place despite the Korean brand’s 9.1 percent increase in sales the first half of 2019 compared to last year’s.

And by year-end 2019, Nissan had ramped up its lead even more over Hyundai to 8,931 units from 3,406 in the first half of 2019 by selling 42,694 vehicles versus HARI’s 33,763.

5 BEST-SELLERS. NPI scored 22.2 percent growth for 2019 compared to 2018, thanks to its five top best-sellers: the Navara pickup truck (19,034 units sold), Terra midsize SUV (10,469), Urvan passenger van (7,157), Almera subcompact sedan (4,857) and Juke subcompact crossover (745).

No doubt, the continuous upward sales performance of NPI contributed a lot to the auto industry’s success in scoring its target 410,000 total overall sales for 2019.

Interviewed online how NPI is able to increase its market share every year, NPI president and managing director Atsushi Najima said that the brand’s continued growth annually is the result of the company’s focus on the fundamentals: Product, Customer Experience, Service, and People.

He said that sales targets, which are broken down per month, are distributed to the network in the beginning of the fiscal year.

“To further motivate our sales force, we organize incentive trips for dealers who are able to achieve their targets,” Najima, who assumed the top NPI position in April 2019, added.

NPI currently has 45 dealerships nationwide with the recent opening of a Nissan dealership in Clark.

“We aim to sustain our growth in the years to come with more innovative products, reliable services, a strong dealer network, and a vibrant company culture of talented people,” Najima concluded.