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Nissan strikes the right Note with customers

By Jay Nagley

The success of the Qashqai and the Juke is a truth universally acknowledged, but the success of the Note is even more remarkable.

The oldest competitor in the B-segment MPV market, and due for replacement, it nevertheless managed to outsell all its competitors last year – even the Vauxhall Meriva.

How did the Note – the automotive form of beige – achieve this unlikely feat?

Firstly, because it’s a product that genuinely meets a need.

Big enough to have a worthwhile space advantage over a supermini hatchback, but small enough to be cheaper to run than a lower-medium car, the Note was well positioned – in exactly the way its Renault Modus cousin was not.

Then Nissan managed its ageing process remarkably well.

Each year, it became better value against the opposition, to the point where its value equation is now almost in Dacia territory.

For example, the Note n-Tec+ currently has a list price of £13,750 and includes sat-nav, climate control and rear parking sensors as standard.

Most cars costing 50% more still do not have that level of equipment.

The combination of lots of space, plus the full Christmas-tree specification, more than makes up for an ageing chassis and functional styling.

Secret weapon

In fact, value is one of Nissan’s secret weapons.

Across all its mainstream models (Micra, Note, Juke and Qashqai) Nissan is determined to win the price/specification battle.

The Note offers space plus value, while the Juke and Qashqai offer funkiness plus value.

There is no evidence, however, that Nissan is losing money as a result.

If it can keep its transaction prices within shouting distance of its list prices, it can still prosper.

The aim is to use its keen prices to reduce the need for discounts, and it seems to be working.

With continued heavy investment at Sunderland (now producing more cars per year than any other UK car factory in history), one has to assume that Nissan’s global bosses are seeing a decent return from its European strategy.

Now Nissan wants to leverage its recent success to re-enter segments in which it was once strong.

Next year will come its first C-segment hatchback since the Almera was yawned out of the UK.

Nissan thinks its new-found credibility (and rapidly expanding parc of customers) means its new car will be taken seriously.

There will also be a new soft-roader to replace the ancient X-Trail – Nissan was once a strong force in 4x4s and sees strong growth potential for its new Kuga-fighter.

It is also not averse to cutting and running when logic dictates.

The Pixo has now been dropped in the UK, as Nissan has accepted that the market for sensible A-segment cars has shrivelled in this country.

So many city cars are either bought as second cars, or chosen by single people, that a sensible city car is almost a contradiction in terms: the sensible car at Pixo money for a family is a used supermini or lower medium model.

Families on a budget cannot afford to spend so much money on a new car with so little space.

In fact, the entry-level Micra is priced so competitively that it can offer an alternative for the few people still in the market for a sensible city car.

Like all strategies, Nissan’s does have its limits.

Value is always a more difficult proposition in premium segments – hence the fact that the undeniably good-value 370Z struggles in the UK.

Despite Britain being the original home of the big-engined, raw two-seater from the 1940s to the 1990s (from the Austin-Healey 3000 to almost every TVR), we are now more concerned with premium badges and ease of driving.

Undercutting a premium car on price is easy – but it just shows that the manufacturer is not premium, which is the great Catch-22 of the car business.

Similarly, Nissan product managers must live in dread of being offered a transfer to Infiniti.

Trying to sell an executive car on the basis of it being better value than a BMW is like trying to sell an airliner on the basis that it is particularly good at taxi-ing down the runway – it kind of misses the point of the product.

Nonetheless, in the mainstream market, Nissan can teach a lot of other manufacturers some valuable lessons.

Many people might think the lesson of Nissan is to design funky. original cars, and that is certainly an extremely important factor.

However, another lesson is much more prosaic – and a lot more relevant to importers who have little or no say in the design process of the cars they sell. 

The Note shows that it is possible to take a product which has comparatively little design appeal (apart from the clever rear seat and parcel shelf combination) and use the price/equipment ratio to make it very appealing.

There is a significant audience for sensible transport (as proven by Skoda, Hyundai and Kia) at the right price, and

Nissan has proven to be adept at tailoring its offering to suit the product and the market. It seems unusually realistic in positioning its products to suit the actual perceptions of buyers, rather than its internal vision of where it would like its products to sit.
 

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Comments

  • BrianB - 05/07/2013 16:04

    FYI, Nissan Note was NOT the best-selling car in its segment last year -- Honda Jazz outsold it by almost 2:1.

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