- US Nissan dealership profitability has dropped by 70 percent in 2024 to its lowest level in 15 years.
- Around 38 percent of Nissan’s 1,071 dealers are losing money, according to a new report.
- The automaker’s network size is optimized for a 7-10 percent market share, but Nissan’s chunk of the pie has fallen to just 1.9 percent.
When you’re buying a new car it can be hard to escape the feeling that, good as the deal you’re getting is, the salesman is always getting a much better one. But anyone buying a Nissan can sleep easy, because there’s a good chance the dealership is effectively paying you to take that new car away.
Nissan dealer profit has collapsed over the past few years dropping 70 percent in the first six months of this year versus the same period in 2023, a new report claims. The situation is so bad that around 38 percent of the automaker’s 1,071 US dealerships are now operating at a loss.
Related: Nissan Wants Dealers To Sell Cars At A Loss, Up To 15% Below Invoice
Auto News data reveals that Nissan dealers are on average achieving a 1 percent return on sales, down from 3.2 percent last year and 5.6 percent in 2022. That slump goes hand in hand with a rapidly declining market share, Nissan’s portion of of the car market having dropped from 5.8 percent to 1.9 percent over the last five years, while Hyundai’s has increased 1.2 percent to 5.1 percent, the report explains.
“In many markets, Nissan dealers are, at best, selling half the volume that competing Honda, Toyota and Subaru and Hyundai stores are selling,” one of five dealers the website spoke to admitted. “If you’re not selling enough new cars, you’re not generating enough trade-ins, which feed profit centers such as finance, service and parts.”
And because Nissan’s dealership network was right-sized to handle a 7-10 percent market share, there’s not enough business for each of the sites to stay busy.
Some of Nissan’s problems can be attributed to a poor product lineup, the automaker being the only major US brand not to offer either mild or PHEV cars and SUVs. But other brand’s dealers are also struggling due to a mix of higher interest rate and lower margins. One industry source told Auto News that average dealer profitability has dropped 30 percent across the industry in 2024.