“Tripple One” strategy key in Nissan’s growth in China

Electric vehicles, light commercial vehicles and trucks as well as sourcing supplies locally are the key components of Nissan’s strategy in China, the world’s biggest auto market.

On Monday, with the aim of placing itself within the top 3 automakers in China, the world’s biggest auto market, Nissan Motor Co unveiled its plan on funneling $9.5 billion in its Chinese operations, with its joint venture partner, over the next 5 years.

Stuck in the second place Nissan Motors and its Chinese JV partner, the Dongfeng Group stated they plan on boosting their volumes to 2.6 million vehicles a year by 2022, up from 1.5 million vehicles in 2017.

The duo plan on achieving their objectives by focusing on the Venucia brand, a plain vanilla local brand that Nissan operates in China, as well as on electric cars; both market segments are expected to see a surge in demand in the near term. Further, they also plan on boosting sales of trucks and light commercial vans, as part of their “Tripple One” strategy.

For nearly two decades , the Chinese auto market has been dominated by Volkswagen AG and General Motors Co.

“We aim to break away from this second-tier group and become a top-3 China automaker,” said Jun Seki, Nissan’s China chief. “We need to go full-throttle aggressive. If we didn’t do that, we would fall behind and fail to grab market share otherwise we could take.”

Electric Vehicles

The “Tripple One” strategy involves maintaining a steady growth of the Nissan brand as well as in the joint venture’s Infiniti brand, said Seki.

The duo plan on increasing the Nissan brand’s annual sales by 500,000 vehicles to 1.6 million vehicles a year and boost the annual sales of the Infiniti brand from 100,000 vehicles to nearly 150,000 vehicles a year by 2022.

Further, Seki disclosed that through the JV Nissan plans on launching as many as 20 EVs across its brands with an aim to sell nearly 700,000 by 2022; this excludes electric light commercial vehicles.

So as to ramp up volumes in the EV segment, Nissan plans on coming up with a low-cost electric cars strategy which involves sourcing key components of electric vehicles from suppliers in China.

In 2019, Nissan plans on launching 3 such low cost EVs under the Venucia brand.

“We expect EV and e-power hybrid business to become profitable,” said Seki without elaborating any further.

Underscoring Nissan’s broader strategy, Seki said, Venucia, like indigenous Chinese brands, is likely to sell as much as global brands, in China. In 2017, Chinese brnds sold 10.3 million vehicles, while global brands sold 13.9 vehicles.

Venucia uses retired Nissan technologies, including transmissions and platforms.

This effort is likely to face competition from established local players, including Baojun, General Motor’s’ China partner.

“No global automakers have a brand that competes with low-cost local brands except for us and GM,” said Seki. “Venucia is our clear advantage and we are going to milk it to grow rapidly”.

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