Nissan North America is facing a recurring challenge of excess inventory, which has led the automaker to implement production cuts for the second year in a row. To address this issue, Nissan has announced a significant reduction in output at its Smyrna and Canton plants for September and October 2024, totaling 40,000 vehicles.
This decision follows a similar move taken last year and underscores the ongoing difficulties the company faces in managing its production levels. The production cuts come amidst concerns raised by Nissan dealers about the impact on their profitability.
Despite a slight increase in sales in the first half of 2024 compared to the previous year, Nissan’s market share in the United States has been declining. Additionally, the company has been struggling to incentivize sales of its popular Rogue model, with dealers complaining about the lack of discounts on the base trim.
While the Rogue remains Nissan’s top selling vehicle in the United States, its sales have declined compared to the same period last year. Other Nissan models, such as the Frontier, have shown improvement but are still outpaced by competitors like the Chevrolet Colorado and Toyota Tacoma.
The production cuts are a temporary measure aimed at reducing Nissan’s inventory levels and improving its financial health. However, the company’s long-term success will depend on its ability to address the underlying issues that have contributed to the inventory surplus, such as market share erosion and challenges in incentivizing sales.
The Nissan Rogue’s sales figures for 2024, while impressive at 141,160 units, pale in comparison to its competitors. The Honda CR-V, Tesla Model Y, and Toyota RAV4 all outsold the Rogue, with the RAV4 leading the pack at 248,295 units. To exacerbate the situation, Nissan dealers were forced to offer discounts of up to 10 percent below invoice on 2024 models to clear inventory, negatively impacting their profitability.
As of now, the most affordable Nissan vehicle available for purchase in the United States is the Versa sedan, priced at $16,680 excluding destination charges. For those seeking electric vehicles, SUVs, or trucks, the Leaf, Kicks, and Frontier are the most budget-friendly options at $28,140, $21,830, and $32,050 respectively.
The redesigned 2025 Armada, Nissan’s flagship SUV, is set to be even more expensive than its predecessor. While the exact pricing has not been released, it is expected to be higher than the previous model.
The 2024 Infiniti QX80, the Armada’s luxury counterpart, saw a significant price increase from $74,150 to $82,450 for the 2025 model year. This trend of rising MSRPs is concerning for Nissan and Infiniti, as it could further erode their market share and profitability.
