) been while Toyota and Honda were cleaning up with the Vitz and Fit? Carlos Ghosn, the former Renault executive who now runs Nissan, ruefully explains: "This is a segment where we didn't renew our [lineup] as quickly as we should have."
Now Nissan has a chance to make up for that oversight. This month, Japan's No. 3 carmaker unveils its answer to the Fit and the Vitz: the March, the first Nissan car to share a platform with Renault, which owns a controlling stake in the Japanese auto maker. Nissan hopes the new car, a reworking of a 10-year-old design, will help the company reverse a perilous decade of sliding sales in Japan. For while Ghosn has pushed Nissan through a brutal restructuring that made the carmaker profitable again--it expects to announce record earnings for fiscal 2001, the second year in a row--Nissan still hasn't reconnected with Japanese drivers. That's despite the launch of a half-dozen new models in the past 18 months. "Nissan can't rely on restructuring forever," says Koji Endo, an analyst at Credit Suisse First Boston in Tokyo. "There's no question it can't afford to fail with this model."
The success or failure of the March also will be a referendum on Ghosn. This is the first Nissan car that firmly bears the Brazil-born Frenchman's imprint and that of his handpicked team of French and Japanese designers. The stakes are high. Last year, 4 of the 10 best-selling cars in Japan were subcompacts. As a result, says Ghosn, "this is a segment where you want to be competitive."
Nissan certainly needs the boost: Last year, it eked out a mere 0.2% gain in Japanese market share, to 18%, a long way from the 33%-plus share of the 1970s. Besides, selling more cars at home would relieve pressure on Nissan's U.S. operations, which analysts say will acount for about three-quarters of the $2.5 billion net profit the company expects to earn in the fiscal year ending in March. "Gaining domestic market share is very important," says Patrick Pelata, executive vice-president for product planning. "It's what everybody inside the company is looking at."
With the new March, Nissan is trying to recapture the edge it held when it pioneered Japan's subcompact market with the original version in 1992. Nissan hopes to lure both longtime March fans and newcomers with an array of styling cues that combine retro with modern. The car's Volkswagen Bug-like silhouette, grinning grill, and compact size are classic. But elliptical headlights riding halfway up the hood are new, as are the faux-ivory dashboard dials. The result is both Japanese and European, reflecting the sensibilities of design studios in Germany and Japan. Says Satoru Tai, the veteran who oversaw the process: "We want people to think of the March as more pet than tool."
Nissan wants this car to turn heads--especially women's heads. That explains five new colors, ranging from paprika orange to lima-bean green. The designers came up with the color scheme after staking out interior-design boutiques frequented by single women in their 20s and 30s, the chief target group. These car buyers tend to have more disposable income than average, in part because most still live with their parents. But they are finicky, prone to fixate on easy seat adjustment and interior color coordination rather than horsepower or trunk capacity. Hence, the ivory knobs. "Not all clothes have black buttons," says Hideshi Saiki, a 34-year-old design team member. "So why should all cars have black controls?"
In a sign of the March's importance to the bottom line, Nissan is bending its own rules to generate buzz. In a break with tradition, dealers have been handing out promo materials and price lists--stamped "company secret"--before the official launch. Since December, marketing teams have fanned out nationwide to brief dealers about such selling points as standard side airbags, a new, gutsier engine, and an onboard computer that allows drivers to download directions and send e-mails--a feature more often found in luxury cars.
Will the March be a hit? Most analysts believe it will, though some current March owners may not like the Euro styling. For his part, analyst Endo predicts back orders will hit 40,000 by the time the car arrives in showrooms next month, creating enough pent-up demand to keep sales at 10,000 units a month for the first six months. That kind of pace would trail the red-hot Fit, which is moving off lots at a rate of 17,000 units a month. But it would easily blow the March past the Toyota Vitz. "Customers are excited about the new model," says Fumio Sato, who runs a Nissan showroom in Tokyo. "It's been a long wait for diehard March fans."
The car is priced to sell. The most basic version starts at $7,800, less expensive than the $8,100 Honda Fit but pricier than the $5,385 Toyota Vitz (table). Nissan can afford to keep the price low because of economies of scale achieved by platform-sharing with Renault. A whole class of sister models will be built around the March, including the similar Cube model, to debut in Japan later this year, and a version for Europe called the Micra. Company officials say Nissan will save hundreds of millions of dollars over the life of each platform by sharing chassis and engines.
If the March doesn't perform as promised, investors will wonder just how sustainable Nissan's turnaround really is. One cause for concern: The Renault veterans now running the show at Nissan have misjudged consumer tastes in Japan before. Sales of the new Bluebird Sylphy sedan and X-Trail sport-utility vehicle have hovered near monthly targets, but other recent additions, including the Stagea wagon, Primera, and Skyline midsize sedans and the Cima, or Infiniti Q45, luxury car, are undershooting sales goals.
To be sure, these cars were all in the development pipeline before Ghosn arrived, but his team tweaked the designs. And while the new March was also on the drawing board, Ghosn's team is responsible for the end result. Early indications are that Nissan has a winner on its hands. But if the March fails, Ghosn's creation will need a new name. How about the Plod? By Chester Dawson in Tokyo