Nissan dealers make too little money

Between 2023 and 2024, Nissan dealers’ average profits fell by 70%, and nearly 40% of dealers are currently losing money.

When you buy a new car, you might feel that, while you’re getting a good deal, the salesperson can always give you a better deal. But anyone buying a Nissan can rest easy knowing that there’s a good chance the dealer is actually paying you to take your new car away.

A new report says profits at Nissan dealers have fallen sharply over the past few years, with profits in the first half of this year down 70% from the same period in 2023. The situation is so bad that about 38% of the automaker’s 1,071 U.S. dealerships are currently losing money.

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Automotive News The data showed that Nissan dealers had an average return on sales of 1%, down from 3.2% last year and 5.6% in 2022. The report explained that this decline was accompanied by a rapid decline in market share, with Nissan’s share of the automotive market falling from 5.8% to 1.9% over the past five years, while Hyundai’s share increased by 1.2% to 5.1%.

“In many markets, Nissan dealers are doing, at best, half the volume of competitors Honda, Toyota, Subaru and Hyundai,” admitted one of five dealers interviewed by the site. “If you don’t sell enough new cars, you can’t generate enough trade-ins, which fund profit centers like finance, service and parts.”

And because Nissan’s dealer network is of a modest size, capturing only 7-10% of the market, the volume of business at each site isn’t enough to keep it busy.

Part of Nissan’s problems can be blamed on a poor product lineup; the automaker is the only major U.S. brand that doesn’t offer mild or plug-in hybrid cars and SUVs. But dealers of other brands are also struggling due to higher interest rates and thinner profit margins. An industry insider told Automotive News In 2024, the average profitability of dealers across the industry will drop by 30%.