Papin wants Nissan to talk about the product — not the deal

Jeremie Papin has spent the past 24 months orchestrating sweeping change over Nissan Motor Co.'s Americas business.

As the region's top boss, the Frenchman is transforming Nissan's product lineup, sales strategy and organizational culture.

"We are different to what we were," said Papin, 48. "We speak about the products, we speak about the brand — we don't speak about the deal. We're focused on the customer experience."

That's a bold about-face for a brand that historically has pumped out vehicles and built a business on selling the deal.

But the Japanese automaker's "Nissan Next" strategy is beginning to pay dividends. A freshened product portfolio has revived consumer interest in the brand and raised dealer profitability and sentiment.

The brand's U.S. sales rose 12 percent last year, an optimistic reversal from 2020, when the automaker suffered its largest annual percentage decline.

Meanwhile, 22 percent of retailers in Kerrigan Advisors' 2021 Dealer Survey now expect Nissan franchise valuations to increase. In 2020, just 8 percent of dealers shared that sentiment.

"Nissan is absolutely back on track and ahead of our plan laid out two years ago [to] build a solid foundation for growth," Papin said. "North America is contributing its fair share of the Nissan improvement and leading the company to show what potential it can have going forward."

Papin, a former finance executive who took over as chairperson of the Americas last spring, has another formidable challenge ahead — steering Nissan into an electric future. Although it was an early pioneer in electric vehicles, the automaker has lost its mojo to sexier competitors such as Tesla.

But Nissan is now gunning for redemption with a wave of more competitive vehicles, starting with the 300-mile Ariya compact crossover arriving this fall.

Papin describes the Ariya as "segment-defining."

"The attention to quality and the innovations we've bought — the central console, how the human-to-machine interface works, how the switches are built into the panels," Papin said. "This is a step above what has been available in this segment so far."

Papin spoke with Staff Reporter Urvaksh Karkaria about Nissan's business transformation plan and the company's transition to an electric future. Here are edited excerpts.

Q: Have you adjusted the Nissan Next plan because of the semiconductor shortage and other supply chain challenges?

A: The fundamentals of the plan have not changed. Access to semiconductors is a battle every day.

We've got resourcing and engineering teams thinking about changing components and fighting for any semiconductor we can find in the marketplace to produce.

Are we selling less than we could because of the interest in the products, the Nissan brand, today? Clearly we are. Is anyone taking [market share] away from us? No. We're very focused on the customer, earning his trust and delivering the right value over time. It's yielding results, so we're going to stick with it.

How have supplier relations changed in the wake of the crisis?

We are attentive to the condition of our supply base. We are being more transparent with suppliers in terms of what we will need and when. We are working with them through the best possible information exchange and managing the uncertainty that remains high.

How does Nissan's shift from volume to value affect its production infrastructure in the U.S.?

Nissan is not turning its back on growth. We are earning the volume; we are earning the trust. We are seeing improvements in the loyalty of Nissan customers and seeing new customers to the brand attracted by the branding and the products.

[Under Nissan Next,] we know where all those cars will go because they have a dealer order against them. Before, there was a great proportion of production that we didn't know where they were going to go. So instead of being focused on retail, we were focused on wholesale.

Now that we are producing what the dealers want, we prepare the advertising for what they're going to get. The cars [retailers] get are what they want. We are in the business of building a profitable company that is sustainable.

How is the new business strategy changing the brand's customer profile?

I'm building a base of new customers to the Nissan brand that is more affluent and has a different profile than we used to have. The focus is on securing high residual value at the end of the ownership that leads to customers becoming brand advocates and repeat buyers.

Are you concerned about the average consumer getting priced out of the new-vehicle market? What can you do?

Nissan strives always to offer the best product at a competitive price. We take pride in doing that. We are very attentive to the ability to pay and willingness to pay because the idea is to expand the customer base in the segments where we compete.

How has Nissan's rental fleet business strategy changed under Nissan Next?

The focus is on using rental fleets to create customer awareness of our product — but doing so at volumes that enhance and protect the residual value rather than weigh on them from a demand and supply point of view. There is an optimal level of fleet volume for each product in its life cycle. We have excellent relationships with the largest fleet customers.

Nissan expects EVs to account for 40 percent of its U.S. sales by 2030. How will you do that?

By launching multiple models in the segments that account for a big share of our sales. There will be a significant increase in the number of EV models for sale in the Nissan portfolio. We haven't communicated the details of the rollout of our product plan, but there will clearly be a number of launches. All of this is driven by the customer and the market demand. We will be bringing new models at price points where we have customers.

Nissan has stopped taking orders for the Ariya in the U.S. Why is that?

Everything we are doing is thinking about the customer. We've got great interest in the car, and we want people not to have to wait for it for too long. We want to provide them with a solid delivery date. By better controlling those dates, we're going to secure a customer experience at the level of what and should be expected.

What has been your approach to securing raw materials you'll need for EV batteries?

The company is engaged in long-term contracts with mining companies or refiners. We're also working hard on developments to have no cobalt in our lithium ion batteries. The company is investing in and developing solid-state batteries, a very promising technology. We will be prototyping it in two years. The benefits of that technology in terms of battery chemistry are more range, more power density, faster charging. That's a technology behind which Nissan's putting its name and know-how. So that's the future for us.

Dealers say Nissan is committed to updating core products at a quicker pace. How do you plan to do that?

By spending engineering resources to enhance the product consistently. Frontier was a 14-year-old truck when we replaced it. We don't plan on doing these types of life cycles again. We plan to keep products fresh in their segments and across the lineup, which means you need to bring a product evolution into the marketplace more regularly.

The Nissan Titan commands just 1.4 percent share of the U.S. full-size pickup market. How can Nissan be more competitive in that critical segment?

The Titan is an excellent truck. The quality build on this truck is very good. The performance of the truck is very competitive. It comes down to product awareness and familiarity. It's about enhancing customers' knowledge of the product and getting customers to try it. The redesigned Frontier has rejuvenated interest in our truck lineup. We've seen a positive impact from Frontier in awareness and consideration for the Titan.