TOKYO — The redesigned Nissan Rogue and Mitsubishi Outlander, hot-selling crossover stablemates recently rolled out by the Japanese partners, are helping the two troubled automakers bounce back to profitability with improved brand positioning and brighter financial outlooks.
Nissan Motor Co. and Mitsubishi Motors Corp. each jumped back into the black in the latest quarter, erasing year-earlier operating losses as the hero nameplates buoyed U.S. sales.
The new offerings, which share substantial platform and drivetrain elements, saw booming demand in the companies’ fiscal first quarter ended June 30. Surging sales helped the brands, both known for their down-market positioning in recent years, rein in incentives and boost value.
U.S. sales of the Rogue, introduced late last year, more than doubled in the April-June quarter, while deliveries of the Outlander, released in April, also more than doubled in the period.
The upswing helped validate the oft-repeated mantra at Nissan and Mitsubishi that a wave of new products will eventually rekindle their flagging fortunes. Both companies are in the middle of restructuring plans but saw enough improvement to lift their outlooks.
Nissan, coming off two straight years of annual operating losses, said it now forecasts a ¥150 billion ($1.37 billion) operating profit in the fiscal year ending March 31, 2022. Nissan had expected to break even.
Mitsubishi also outlined a brighter future. It now expects to rebound from a big operating loss last year to a ¥40 billion ($361.8 million) operating profit in the current fiscal year. It had predicted a fiscal year operating profit of ¥30 billion ($271.4 million).
“A central part of our strategy is our rollout of new and enhanced models, featuring bold designs and compelling vehicle technology, which enables Nissan to improve price point and customer value,” Nissan COO Ashwani Gupta said while announcing his company’s financial results last week. “We are shifting our company from volume, driven by incentive, to value driven by the pricing.”
In the U.S., the redesigned Rogue boosted its share of the crossover segment to 13.7 percent in the latest quarter, up from 9.6 percent a year earlier, according to the Automotive News Research & Data Center, and narrowed the gap with the Toyota RAV4 to about 11,000 vehicles. A year earlier, the Rogue trailed the RAV4 by some 38,000 vehicles.
Gupta said the updated Rogue’s transaction price increased 22 percent, helping boost its net revenue per vehicle about 28 percent. Overall, Nissan was able to increase its net revenue per vehicle by about 16 percent from 2019 levels, compared with only a 2 percent increase a year earlier.
The Rogue and Outlander also enabled Nissan and Mitsubishi to reel in spiffs.
Incentive spending on the Rogue fell to an average of $2,637 in June, from $4,789 in June 2020, according to promotion data from Motor Intelligence. Mitsubishi’s outlays for the Outlander dropped to an average of $2,889 this June, from $3,905 a year earlier.
“All over the world, we have reduced our incentives as a consequence of customers willing to pay,” Gupta said. “Not only did we gain market share, but our product value is recognized more.”
The success of the Rogue and Outlander is significant because the vehicles are an outgrowth of cooperation between the Japanese partners and show potential for future alliance collaboration.
Next up for the partnership is an all-electric minicar that both companies are planning to release sometime next year.
Nissan brought Mitsubishi into a three-way partnership with Renault in 2016, when it bought a controlling 34 percent stake in the smaller Japanese automaker. But the Franco-Japanese alliance teammates have been coping with red ink and slumping sales in the wake of the 2018 arrest and ouster of longtime chairman Carlos Ghosn, who oversaw all three companies.
Mitsubishi hailed the Outlander as its new halo product. In the April-June quarter alone, U.S. sales of the Outlander more than doubled to 6,954 vehicles, from 3,020 the year before.
Mitsubishi said the restyled offering, with upgraded technology, attracted a customer base with higher credit scores. And it helped drive traffic to the brand’s three other nameplates. Total retail volume rose 106 percent to 25,146 vehicles in the April-June period.
CFO Koji Ikeya said Mitsubishi is making good progress toward its goal of deriving half its global sales from electrified vehicles in 2030. It has introduced the Eclipse Cross PHEV compact crossover, its second plug-in hybrid, and plans to release the redesigned Outlander PHEV in the second half of the current fiscal year.
“We continue to focus on product innovations and introducing new models,” Ikeya said.
Naoto Okamura contributed to this report.
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