Cutting new-car prices is a great way to boost sales, but it’s not always kind to the dealers stuck with the inventory. Nissan gave its franchisees authorization to sell vehicles below invoice, but some stores are unhappy with the brand’s shifting attitudes toward their profitability.
Many Nissan dealers have already been selling below invoice, saying that demand has been so weak that they have been forced to incentivize any buyer willing to walk onto the lot. Others have called out the automaker’s shifting attitudes regarding dealer profit numbers, as it previously promised to prioritize their bottom lines over aggressive sales tactics.
The company has one of the largest supplies on dealership lots, with Cox Automotive reporting that it averaged 98 days of supply at the end of March. While that made Nissan the slowest-selling full-line brand, some franchisees see a race to the bottom as bad for the brand.
Dealers won’t be required to shift pricing, but those who do need to take a strategic approach. They’re looking to apply discounts to slower-selling vehicles while holding more desirable models closer to cost and could target less well-equipped trims instead of variants with more compelling features. Many will also focus on trade-in values, financing, and service to recoup some of the lost profit from the price cuts.
Those moves could be a short-term fix, but as Automotive News pointed out, dealers risk bad blood with customers who come to the store looking for one model, only to find out the configuration they want isn’t available at the lower prices.
[Image: Ken Wolter via Shutterstock]
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