Nissan on quest to strike gold in Brazil
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.”