Major Investments by Japanese Automakers Bolster US Sales Networks

Strategic Insights -

Japanese automakers Nissan Motor Co., Toyota Motor Corp., and Honda Motor Co. are investing heavily in their US sales networks, with a focus on renovating local dealerships to better compete with American automakers. This move follows the steady increase in production in the US and is expected to give them an edge in the market. Nissan's project involves spending over 500 billion yen (US$4.5 billion) to renovate 1,200 local dealerships, with work already completed for 250 Nissan dealerships and another 800 slated for renovation. Toyota plans to spend over 200 billion yen over the next two years to revamp 1,400 dealerships, while Honda will continue its store renovations.

Key Takeaways:

  • Nissan is investing over 500 billion yen (US$4.5 billion) to renovate 1,200 local dealerships in the US.
  • Renovation work has been completed for 250 Nissan dealerships, with another 800 slated for renovation.
  • Toyota plans to spend over 200 billion yen over the next two years to revamp 1,400 dealerships in the US.
  • Honda will continue its store renovations in the US.
  • Nissan's renovations will benefit both Nissan and Infinity dealerships, with the company sharing the renovation costs with the dealerships.
  • The renovations are expected to give Nissan an edge in the US market, following the steady increase in production in the country.
  • Nissan's new plant in the US, which came onstream in spring 2003, has raised the company's output in North America to 1.4 million units, about the same as Honda.
  • The variety of vehicles Nissan now builds in the US has expanded to include both passenger cars and small trucks.

Statistics:

  • Nissan plans to spend over 500 billion yen (US$4.5 billion) on dealership renovations in the US.
  • 1,200 local Nissan dealerships will be renovated as part of the project.
  • 250 Nissan dealerships have already completed renovation work.
  • 800 additional Nissan dealerships are slated for renovation.
  • Toyota plans to spend over 200 billion yen on dealership renovations in the US over the next two years.
  • 1,400 Toyota dealerships will be revamped as part of the project.
  • Nissan recorded sales of 93,000 vehicles in May, up 7 per cent year on year.
  • Sales of the US Big Three automakers declined by 10 per cent in the same month.
  • Nissan's US output rose to 1.4 million units in 2003, thanks to the new plant.

Sources:

  • (TSE:7201) Nissan Motor Co.
  • (TSE:7203) Toyota Motor Corp.
  • (TSE:7267) Honda Motor Co.
  • Nikkei