Nissan starts incentives as US sales sag

BLADDER_MASTER · Aug 29, 2006

Nissan starts incentives as US sales sag

By Bernard Simon in Toronto
Updated: 1:10 a.m. ET Aug. 26, 2006

Nissan has unleashed a "buy now, pay later" promotion in the US to bolster sagging car and truck sales.

The Japanese carmaker's performance is under intense scrutiny as Carlos Ghosn, its chief executive, explores an alliance between Nissan, Renault, which owns 44 per cent of Nissan, and General Motors.

The talks were initiated by Kirk Kerkorian, the reclusive billionaire who is one of the loss-making Detroit carmaker's biggest shareholders and sees Mr Ghosn's turnround skills as a possible boon for GM.

Nissan's sales in North America have recently lagged its two Japanese rivals, Toyota and Honda.

A dearth of new models contributed to Nissan and Infiniti, its luxury brand, reporting an 8 per cent fall in sales in the first seven months of this year, compared with the same period last year.

Toyota and Honda pushed up sales by 10.1 and 6.9 per cent respectively.

Nissan was one of the few carmakers whose car inventories rose last month, after a 19.5 per cent sales slump.

Mr Ghosn has also stirred controversy over a decision to move the US head office from California to Tennessee, resulting in the loss of several senior executives.

According to Edmunds.com, an online pricing service, discounts and other incentives on Nissan vehicles averaged $2,618 in July, against little more than $1,000 offered by Toyota and less than $900 by Honda.

Spending by the three Detroit-based carmakers â€“ GM, Ford and Chrysler â€“ was significantly higher.

Nissan's sales are expected to pick up in coming months with the launch of the compact Sentra and mid-size Altima cars.

The small Versa car went on sale in spring. But sales of these models could be offset by a further slide in sales of more profitable big sport-utility vehicles and the Titan pick-up truck.

Under the new month-long promotion, buyers of all Nissan vehicles, including 2007 models, will be allowed to delay payment for 130 days from the purchase date, enabling prospective buyers to put off payments until early 2007.

The Japanese carmaker said the promotion was also designed to stimulate business for Nissan's financing arm.

Meanwhile, Toyota shares slipped on Friday after the company acknowledged that it might delay some model launches to improve quality controls.

Toyota has been hit by a number of vehicle recalls in various parts of the world, fuelling concern that rapid growth in recent years is diluting its famed reputation for reliability.

The company recalled more vehicles than it sold last year in the US, its biggest market.

Katsuaki Watanabe, Toyota's president, said on Friday: "We try to affirm each process. And in that process, some may be delayed, and some may be on time."

He said the emphasis was on ensuring that quality-control procedures were properly carried out, rather than on how much time the process took.

Mr Watanabe added that Toyota was reviewing design, procurement, and other elements in car manufacturing, while examining buyers' complaints to reduce production defects.

Source: http://msnbc.msn.com/id/14518610/

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