Nissan posts flat China sales, seeks to focus on small, no-frills cars – Reuters

Nissan's logo is pictured on an engine of Maxima model during the Auto China 2016 auto show in Beijing, China April 25, 2016. REUTERS/Kim Kyung-Hoon

Nissan’s logo is pictured about an engine of Maxima model throughout the Auto China 2016 auto prove to in Beijing, China April 25, 2016.

Reuters/Kim Kyung-Hoon

Nissan Motor Co (7201.T), which about Monday reported flat sales growth in China, is trying to reclaim energy by focusing about small, affordable vehicles, a hot segment in the world’s biggest auto market.

But analysts predict sales by the Japanese automaker and its Chinese joint-endeavor companion will certainly most likely stay slow-moving for numerous much more months.

Nissan reported a 0.7 percent raise in sales last month to 96,200 vehicles. The joint venture’s sales for the initial 4 months of this year inched up 0.8 percent to 394,800 vehicles. Nissan said it was still aiming to sell 1.3 million vehicles this year in China.

Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight, said Nissan and certain various other global automakers earned a mistake in neglecting no-frills brands, such as Venucia for Nissan, which they established numerous years ago in China.

Demand has actually been solid for no-frills vehicles from indigenous Chinese automakers such as Excellent Wall Motor Co (601633.SS), assisting to erode the market discuss of foreign vehicle makers in China.

“They can’t compete successfully due to the fact that their offerings in cheap, no-frills SUVs are thin,” Zhang said, referring to Nissan and various other global automakers.

One notable exception has actually been Baojun, a China-just brand of affordable cars run by Total Motors Co (GM.N) jointly along with its neighborhood Chinese automakers. GM said earlier this month Baojun sold 37,915 vehicles in China in April, an raise of 56 percent from a year earlier.

Venucia, Nissan’s neighborhood China brand that competes head-about along with Baojun and indigenous Chinese brands, has actually a lot ground to gain, Zhang said.

Nissan became aware of that concern in late 2014 and has actually been scrambling because to come up along with a remedy: an array of brand-new and redesigned vehicles to raise Venucia sales, Jun Seki, Nissan’s China chief, told Reuters last month about the sidelines of the Beijing autoshow.

“We hadn’t truly seen this trend coming, However because late 2014 and the begin of last year, we began adjusting our strategy,” Seki said.

As a result, numerous brand-new Venucia models are seeing strike showrooms in China beginning later this year.

Foreign global automakers accounted for much more compared to 65 percent of China’s passenger vehicle market until 2014, according to Seki. That discuss fell to here 60 percent last year, and it continued to shrink to 56 percent in the initial quarter of this year, chiefly as a result of the popularity of small, affordable SUVs from indigenous Chinese no-frills brands.

(Reporting by Norihiko Shirouzu in Beijing; Editing by Stephen Coates and Muralikumar Anantharaman)