Nissan Rides China Headwinds



Nissan Rides China Headwinds

Sales for Nissan in China remained strong in the first half of the year despite an overall industry slowdown, hitting a record peak.

Nissan sold over 780,000 vehicles from January through August, growing 20 percent on year.

Auto sales overall have seen a sharp pullback in growth since China began phasing out sales incentives first introduced to ward off the economic downturn.

Auto consultant Ashvin Chotai says the sector is likely to face strong headwinds this year, coupled with government efforts to rein in growth.

“There’s a lot of macroeconomic headwinds, a lot of monetary tightening, concerns over inflation, concern over the knock-on effect of the clampdown measures in the property market. As you know, the stock market’s not doing well. So the wealth effect indicators are a bit of a headwind,” says Chotai.

“Having said that, I’m still reasonably positive about the passenger car market – I expect growth of between 6 and 7 percent at the wholesale level this year.”

According to an industry group, the trend of small growth in sales is likely to be sustained.

In capital Beijing, the situation is especially marked after authorities clamped down on the number of new car licenses.

“The situation in Beijing is not representative of mainland China. The new restrictions have had a negative effect on car sales here in Beijing,” says Shang Zonglin, general manager at a Dongfeng Nissan’s dealership in Beijing.

“But in fact, the auto industry in China is still on a slower, upward trend. For us dealers, I’m still confident about auto sales.”

Nissan’s Chinese partner Dongfeng Motor Co. Ltd aims to add another 1,000 dealer outlets to its existing sales network in China by 2015.

That’s more than half the total number of new dealer outlets seen globally in the “Nissan Power 88” Mid-Term Plan and a cornerstone to achieving 8% global market share by 2016.

Dongfeng Nissan’s dealerships recently came in tops amongst non-luxury automotive brands in a sales satisfaction survey by J.D. Power, which measured factors including sales initiation to the delivery process.

In China, network expansion is mapped out at a pace of one new dealership opening every two days, a clear sign of how Nissan is eyeing growth prospects in the world’s largest auto market.

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