Nissan on quest to strike gold in Brazil

National Post (Latest Edition) - - FINANCIAL POST - John Lipp ert Fabiola Moura and

Like so many things in Rio de Janeiro, Car­los Ghosn’s turn in the Olympic Torch Re­lay on Fri­day didn’t go as planned. Ghosn, who is chief ex­ec­u­tive of­fi­cer at both Nissan Mo­tor Co. and Re­nault SA, was sup­posed to fin­ish his 200- me­ter leg right in front of a Copaca­bana ho­tel cov­ered bot­tom to top in ad­ver­tise­ments for Nissan’s new­est car.

The route changed and changed again. The ar­rival of the torch was de­layed. Ghosn’s run was cut short, and when he walked to meet vis­it­ing re­porters, se­cu­rity guards swarmed him. Take it easy, Ghosn said in the Por­tuguese of his na­tive Porto Velho: “I’m Brazil­ian.”

Fo r the 62-year-old Ghosn, the Rio Olympics are more than a home­com­ing. Nissan re­port­edly paid about US$ 250 mil­lion to spon­sor the games, a cam­paign that high­lights its re­cent in­vest­ment in Brazil and a brazen bet that the coun­try’s bat­tered econ­omy is on the verge of re­cov­ery.

When it does, Ghosn says, he wants Nissan and Re­nault in po­si­tion to grow their com­bined mar­ket share by 50 per cent. “It looks like if we are not at the bot­tom, we are not very far from it,” Ghosn said.

The firm is us­ing the games to un­veil a new com­pact SYV, the first time any ma­jor au­tomaker, Nissan in­cluded, has ever used Brazil to launch a model des­tined for a global mar­ket. The CUV, called the Kicks, was con­ceived, with the help of Nissan’s Rio de­sign team, with the con­gested, poorly main­tained streets of many ma­jor Latin Amer­i­can cities in mind: It fea­tures high ground clear­ance, a nar­row body and four on- board cam­eras to warn driv­ers of haz­ards.

“Brazil­ian con­sumers saw us as a good Ja­panese brand, but lack­ing a lo­cal taste,” said Jose Ro­man, Nissan’s vi­cepres­i­dent for Latin Amer­i­can mar­ket­ing. In an ef­fort to change that per­cep­tion, the com­pany has hired Brazil­ian celebrity Lu­ciano Huck as pitch­man, and the Kicks will be avail­able with a two-tone fin­ish, with a bright orange roof and a gray body. Nissan hopes to sell 50,000 Kicks in Latin Amer­ica in the next 12 months, Ro­man said. The price for a fully loaded model starts at about 85,000 reais (US$26,850).

For now, Nissan will im­port the new CUVs from Mexico. Then the com­pany plans to add pro­duc­tion at its new 2.6- bil­lion reais fac­tory in Re­sende, north­west of Rio. The Brazil­ian push in­cludes in­creas­ing the num­ber of Nissan deal­ers in the coun­try to 239, up 52 per cent from its cur­rent level.

Nissan cur­rently sells fewer cars in Latin Amer­ica than Ford or GM. In Brazil, Nissan and Re­nault are ex­pected to com­bine for 10.9 per cent of sales in 2016, ac­cord­ing to IHS Global In­sight. Fiat Chrysler last year opened its big­gest fac­tory world­wide in the Brazil­ian state of Per­nam­buco to build Jeeps. But Fiat still trails Chevro­let, which claimed 16.9 per cent of the mar­ket in July.

The con­di­tions have dis­cour­aged some of Nissan’s com­peti­tors. Honda said in March it won’t open its new US$ 250- mil­lion as­sem­bly plant in Iti­rap­ina un­til Brazil’s econ­omy re­cov­ers.

For Nissan, it could take longer than Ghosn ex­pects for the com­pany in­vest­ments to pay off. Com­bined Nissan and Re­nault pro­duc­tion in the coun­try should hit 298,000 in 2020, up about 28 per cent from 232,445 this year, IHS an­a­lyst Stephanie Brin­ley said.

“As Nissan, we need to im­prove the aware­ness of the brand, which is ob­vi­ously not the case for some of our com­peti­tors who are very well-estab­lished,” Ghosn said. “Par­tic­i­pat­ing in the Olympics is a good way to boost this aware­ness, par­tic­u­larly when you have new prod­ucts and good things to tell the pub­lic.”

Rio res­i­dents and vis­i­tors will prob­a­bly get the mes­sage. Fleets of Kicks drove be­hind the torch re­lay in each city, in­clud­ing a stopoff at the Nissan fac­tory in Re­sende. The com­pany also pro­vided 4,200 cars and trucks to ferry ath­letes and dig­ni­taries around Rio dur­ing the games. The com­pany in­tro­duced a cam­paign on TV and on­line fea­tur­ing Huck, a high- pro­file talk- show host. In one stunt, Huck whisked an un­sus­pect­ing 22-year-old Brazil­ian sales­man out of the Rio air­port to Ja­pan, where they eat sushi, try to sell perfumed Brazil­ian panties on the streets of Tokyo, and even­tu­ally tour a Nissan fac­tory.

“Nissan wants to pro­mote it­self all over Brazil as hav­ing been one of the com­pa­nies that sup­ported the coun­try dur­ing its Olympic Games,” said Rick Bur­ton, a Syra­cuse Univer­sity man­age­ment pro­fes­sor. “If in five years Nissan is one of the ma­jor brands that ev­ery Brazil­ian rec­og­nizes, they’ll look back and say this was money well spent.”

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