Three Missteps that Paved Nissan’s Rocky Road
A recent Automotive News article by Hans Greimel delves into the challenges currently facing Nissan Motor Company. Greimel describes how CEO Makoto Uchida has launched an “emergency recovery mode” as the automaker revises this fiscal year’s sales and profit projections downward.
This news is a sobering moment for a company with a rich, century-long history. In 1914, Masujiro Hashimoto founded Kaishinsha Motor Car Works in Tokyo, producing its first car, the DAT. Over the years and after merging with other manufacturers, this entity would evolve into Nissan. Following World War II, Nissan grew its global footprint with the Datsun brand, celebrated for affordable, durable, and efficient cars that also helped Nissan establish a strong foothold in the U.S. market.
The 1970s brought Nissan acclaim in the U.S. with the launch of the 240Z sports car, a model that would come to embody Nissan’s reputation for performance and design. My own history with Nissan connects here. I drove my dad’s 260Z 2+2 during college, a four-seat version of the original 240Z. From the 240Z in 1969 to the critically acclaimed 350ZX in the late 1980s, it primarily was the Z cars that built Nissan’s reputation.
However, while analysts often spotlight Carlos Ghosn’s impact from 1999 to 2018 as CEO—and the controversy that surrounding his tenure—I believe three long-standing failures at Nissan paved the way for today’s challenges. Here’s my take on where Nissan went off course, and how these missteps set the stage for its present struggles.
The Neglect of the Z Car
Automakers often have “hero cars” that symbolize the best of their brand’s identity. For Nissan, the Z car was that hero, the foundation of its reputation for innovation and performance. Unfortunately, Nissan allowed the Z car to wither by letting the vehicle age with long gaps between model updates. For instance, the 370Z launched in 2009 remained largely unchanged for over a decade. In prioritizing more mainstream models, Nissan essentially sidelined the Z car that established its reputation.
A Rebranding Misstep: From Datsun to Nissan
The 260Z I drove in college actually wasn’t a Nissan. It was a Datsun 260Z. In the early 1980s, Nissan began unifying its global brand under one name, moving from Datsun to Nissan. This transition created consumer confusion in markets like the U.S., where Datsun had strong brand loyalty. For a time there was the simultaneous use of both names—“Datsun by Nissan”—which only muddled the message further. Many believe Nissan eventually rebuilt its brand equity. However, I think the Datsun-to-Nissan rebranding process weakened customer loyalty and trust, while also hindering future growth in brand stature.
Infiniti’s Struggle to Find its Identity
In 1989, Nissan launched its Infiniti brand to break into the U.S. luxury market alongside Toyota’s Lexus. Infiniti initially focused on performance and Zen-inspired designs that didn’t fit the traditional luxury mold. Lexus, on the other hand, emphasized quality and customer service, with the brand achieving immediate sales success with its LS400 sedan.
Thirty-five years after the launch of Infiniti, the brand still has not found its place in the luxury automotive segment. Infiniti lacks a cohesive identity, unlike its most direct competitor, Lexus.
Nissan’s journey is a lesson in how strategic missteps, even decades ago, can cast long shadows. While the Ghosn era continues to attract attention, these three factors—the neglect of the Z car, a fumbled rebranding, and Infiniti’s identity crisis—have played a profound role in shaping the company’s current state.