According to a recent report, approximately 70% of profits vanished from Nissan dealerships in 2024 compared to the previous year
Nissan dealers in the United States are facing a challenging year. According to a report by Automotive News, profits have dropped by 70% compared to the same period in 2023.
A source familiar with Nissan’s difficulties revealed to Automotive News that about 38% of Nissan’s 1,071 dealers in the U.S. are operating at a loss. Profitability has sunk to its lowest level in 15 years. The report attributes this downturn to two main factors: a lack of hybrid options and an oversaturation of dealerships.
Currently, Nissan is the only major automaker in the U.S. without a mild-hybrid or plug-in vehicle in its lineup. Although the company plans to address this with a plug-in hybrid based on the Mitsubishi Outlander PHEV and a hybridized Rogue by 2027, competitors are seeing significant sales from hybrid models. Automotive News highlights that nearly 30% of Toyotas sold last year featured hybrid technology, and hybrids comprised about half of Accord and CR-V sales in 2023.
There are currently too many Nissan dealers in America relative to the company’s market share. Nissan vehicles account for 5.8% of cars sold in the U.S., down from 7.7% five years ago. Dealers interviewed by Automotive News indicate that the existing network of dealerships cannot be sustained with this market share, with some suggesting that the number of dealerships should be reduced by up to 40%.
For perspective, Nissan has more dealers than Honda, Hyundai, or Kia. Closing underperforming dealerships could potentially allow larger stores to thrive and enable smaller, successful dealers to expand.
However, it remains uncertain whether the company has the financial resources to buy out these dealers. Regardless, Nissan needs to implement changes to improve its performance.
