As the Renault-Nissan alliance pushes ahead with electric vehicles, Nissan UK’s Jim Wright tells Dave Leggett that the sector is set to gain market momentum as the vehicles become more visible.
Nissan in the UK has performed well in recent years. In 2008 the company sold 65,000 cars. It finished 2011 on 110,000 units. There’s been a deft rebalancing of strategy. New product is an important element in the story. The Sunderland made Qashqai has been a roaring success across Europe, including the UK. The much smaller B-segment Juke, a diminutive crossover that is also made at Sunderland, has also been a hit – 22,000 were sold in the UK last year.
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Nissan’s strategy in Europe has been to offer more models at the small car end, each one pitched at a distinct market niche and possessing its own particular design and engineering origins. There’s the Pixo, a very low-cost four-seater City Car made in India and sharing platform with the Suzuki Alto. Then there’s the Note, a tall five-door hatchback made at Sunderland and based on the last Micra’s platform. That will be replaced by the just-announced Invitation.
And the small Micra hatchback is now produced in India. That keeps the cost down and enables Nissan, in common with other makers, to develop its Indian plant as a hub and specialist for small cars.
The Micra sells in much smaller numbers in the UK than was once the case when it was Nissan’s sole small car. Better to sell Jukes with a bigger margin. The standout model in Nissan small car group, Juke looks like a shrunken Qashqai.
“Juke is a segment breaker,” says Nissan GB Managing Director Jim Wright. “We are the first. It’s a car that appeals to modern retail customers.”
Wright describes the evolution of new Nissan products as part of a strategy to focus much more closely on the needs of retail customers.
“I remember when we used to sell 45,000 Micra cars a year in UK and we were effectively a Micra franchise. The problem with that is that there is not much profit in small cars, for the manufacturer or the network,” he says.
“We were doing a lot of short-cycle business back then and the network was living off that business. We have stopped that and changed our business model. And we’ve asked our dealers to do that as well, to focus on retail and the customer experience. We have reoriented our business – and the dealers’ business – to something that is much more positive.”
Reinforcing the emphasis on retail, another aspect to Qashqai’s success is strong residual values.
“Even today, fifth year of its life, Qashqai has the strongest residuals in its segment,” says Wright. “This is all part of a positive cycle that we have managed to build.”
But what about the Nissan Leaf? How important is that electric vehicle to Nissan in the UK? Wright acknowledges that not much has happened yet in terms of sales. There have been supply issues on the car as result of last year’s earthquake in Japan and he reckons the UK media have been generally hostile. They are missing the point, he believes, and the benefits of electric vehicles will become much clearer in the future. The electric tide is rising, but it is only just turning.
“We haven’t yet aggressively communicated this car and the UK media is generally quite negative about EVs in general as a concept. It is very difficult for the PR team to overcome that,” he admits.
“But what we’ll do this year in the lead up to localisation is be more aggressive with the communication. One of the things that we haven’t done is talk about the economic benefits of this. A lot of the media say ‘this is an expensive car’. But our car does the equivalent of 600 miles a gallon, there’s no benefit-in-kind [company car] taxation. In our car you don’t pay the [London] congestion charge. In our car in some London boroughs you can park for free. And in our car there are loads of other economic benefits that we haven’t really spoken about.
“Even with our fleet customers – because of the supply situation and so forth – we’ve been a little hesitant and we need to be far more proactive.”
And Wright believes that people will start to accept electric vehicles as they become more visible.
“The other dimension about EVs is that Renault will start selling them, so will BMW, Ford will start selling, Volkswagen will start selling…
“By definition, the level of consciousness in the public’s mind about EVs and the acceptability of them will increase. We won’t be the only voice. Yes, we’ll have to shout louder to be heard, but we’ll be part of a bigger EV community and this will help to drive volumes up.”
When Sunderland Leaf production at Sunderland starts in 2013, the product offering will be wider Wright says, which holds out the hope of a lower price point than the current Leaf. The configuration of the car will be different to the current Leaf, which offers Nissan opportunities in terms of packaging.
“We’ll have a wider product offering, which means a wider price range – cars above and below current Leaf spec and price,” Wright says.
There is also a need for considerable network investment ahead of selling the Leaf in bigger numbers.
“This year we will roll the Leaf network out to all of our network. There’s investment required to install fast chargers and train staff, but every dealer will be up and running with Leaf by the end of this year.”
Nissan is also actively investigating business/fleet applications for electric vehicles.
The e-NV200 Concept was shown last week in Geneva. It’s an electric version of a commercial vehicle that is also available as a window van.
“We are trialling the e-NV200 with some of our large UK fleet customers right now. These are businesses suited to having such a commercial vehicle in their fleet – think utility companies for example, with known short cycle daily usage, the power is free and the business, say, is to be in electricity – these sorts of companies are ideal customers for such a vehicle. And from an economic perspective it makes great sense.”
Wider visibility is potentially key here also.
“I’m really quite excited about what this vehicle can bring in terms of the image of EVs. If you have a large utility customer, or any other large fleet operator, using these vehicles on a daily basis, it’s another positive.”
Wright sees EVs as a start-up. “People need to get used to them,” he says.
So far the volumes have been small. Once they start appearing on neighbours’ drives and in daily usage, acceptance and sales should rise, the argument goes. But the car company has to calibrate its offering and package carefully to market needs. And Wright does not believe that there’s a technical solution to ‘range anxiety’ criticisms just around the corner, despite battery performances continually improving. The car company response may have to be more subtle.
“We need to get our targeting right. For a retail customer, as a second car with low daily mileage, these cars make perfect sense. But maybe we need to look at ownership packages to accommodate the need for occasional longer journeys. As the volume grows and the volume pressure grows, we will be more creative in solving the customer needs rather than just waiting for the day when the EV will go for 200 miles on a full charge.”
But the media criticism of electric vehicles, Wright maintains, misses the point.
“It’s a kind of start-up story, but this is going to happen. It’s a question of time.”
