The Crisis at Nissan

[Charged Up]

Nissan announced that they will deliver 10k to 20k Leafs in 2011, instead of the 20k target they had set.

What they have offered by way of explanation to Automotive News is:

"It's different than anything we've ever done, launching the car in three global markets at the same time," Castignetti told Bloomberg on Wednesday. "We knew it wasn't going to be easy."

And also:

Company spokeswoman Katherine Zachary said today that only 46 percent of reservations are converting into deliveries "for many different reasons." Some reservations, which require a $99 deposit, were made by consumers in cities where the Leaf is not yet available, she said.

Or if you don’t like that answer how about:

“Retail sales are complicated by a requirement that buyers install a home charging system before taking delivery. “

Or maybe you would prefer:

“The rollout also was complicated by a cautious startup of the Leaf's lithium ion battery plant in Japan.”

And finally the trump card:

“The March 11 earthquake and tsunami.”

This all smacks of desperation, really. This is supposed to be Nissan’s halo car, its bridge to the future of personal transportation. Nissan missing these numbers is an alarm bell going off. These targets are set to be easily reached, so that when they blow through them they can turn the press and say “Gee aren’t we swell?”

Missing by a little is a black eye. Missing by half is a disaster. If they had just blamed it on the earthquake and tsunami I would have bought it, but all this floundering around for an excuse is not a good thing. My favorite is “some of these cars were bought consumers in the wrong states” excuse. Brilliant, your reservation system is so whacked you let customers who have no hope of getting one before the decade is out, plunk down cash on it, and then blame them for your poor rollout? Have to admire chutzpah like that.

This is gonna be a business school case study on now not to rollout a new product. For those keeping score, the strike list against the Leaf is growing. “Little things” like:
“Faulty AC sensor which prevented the car from starting.” Not to worry said Nissan it won’t shut the car down while you’re driving. Only leave you stranded once you try to start up…um thanks Nissan.

Then there was the undersized charger. It took one month of deliveries before it dawned on Nissan that hmm the 240v charger really should be a little larger.

But of course they were probably thinking that the DC fast charger had them covered because most homes have 440v 3 phase power in the garage right? Speaking of the DC fast charger another “opps.” The standard they selected is not going to be the err well standard in North America.

Then there was the range estimating algorithm that was so erratic that most owners thought it was a random number generator for the lottery. Supposedly, fixed with a software update.

All of this is the result of rush. Nissan came from nowhere to announce that they would be first to market with a mass produced EV. Yes they can point to some EV experiments in the 90s. Guess what, Ford and GM can point to EV experiments in the 70s, 80s, and 90s. Does that mean they have 40 years experience making EVs? Not!

Some things were not right, and they were having to recook to get it right, and then disaster happened, natural, not their man made one. I mean what is the contingency plan for “hey isn’t that our electric motor plant floating down the Hanshin Expressway?” Not to mention losing 6 Nuke turbines… forever! You don’t recover overnight from these things.

Does this mean the Nissan Leaf is a flop? Not at all. The car does exactly what it is supposed to do, but things could have been better. Nissan will get it right sooner or later, but this is absolutely not the right way to rollout such an important vehicle. Nissan will really have to roll up their sleeves on this one. But I wouldn’t be betting against them.

[Charged Up]

http://rumors.automobilemag.com/sales-g ... 50863.html

http://www.autonews.com/apps/pbcs.dll/a ... 09959/1448

[Herm]

I think you are grinding that axe way too much, its worn down to nub by now.

Supply problems are understandable but they should improve now that production has stabilized and a steady amount of cars will come into the country every month.. IIRC something like 1700 cars a month?.. total plant production in Japan is 4000 but they have to supply several countries.

Nissan has made three major mistakes..

1. early release for publicity reasons, they had no cars to actually sell and created lots of angst.. but it did serve its purpose of killing several competitors such as Coda.. probably the main reason Ford is not gun-ho on the Focus BEV, they cant match the $32k price and are not willing to pour too much money down the drain. Nissan is serious about BEVs, they are building 3 plants and 3 battery factories across 3 continents.. Ford just subcontracts out to a third party for everything. GM on the other hand actually built Volts for a month or two, stored them, and then released them for sale in a flood. GM is smart.

2. a reservation system.. this always creates trouble.. mass produced cars are built in batches, usually grouped by color so that not too much money is not wasted flushing paint of one color for another out of the automated guns in the paint booths.. they are also held up until a "parts kit" is available for each particular car.. its very complex and usually automated. Customers get very furious when their neighbor across the street gets a car before they do, and yet they reserved earlier.. sometimes months earlier. GM tried this with the new Camaro and it was also a PR disaster.

3. direct internet ordering.. this is also another disaster born out of desire to be nice to the customer but it also backfired. It stabs their dealership network in the back, their only customers.. then they had to outsource (probably from the Philippines) customer support personnel to answer the inevitable questions that could not be answered.. usually dealers insulate the manufacturers with the customer but they could not in this case, they were bypassed. Lots of people (probably you too, did you try to order a Leaf?) are very angry with Nissan and will probably never buy any of their cars again.

[Charged Up]

New postby Herm » Tue Jun 07, 2011 3:47 am
"I think you are grinding that axe way too much, its worn down to nub by now."

I have no axe to grind. I know this is the Ford Focus Electric forum, but I am first and foremost an EV enthusiast. I want to see at least several players succeed at the EV game because it will take that many to make it viable. If Ford had messed it up this bad, I would be letting them have it with both barrels too.

After reading your post I don't think we really disagree.

Me: "All of this is the result of rush. Nissan came from nowhere to announce that they would be first to market with a mass produced EV."

You: "1. early release for publicity reasons, they had no cars to actually sell and created lots of angst" I think you would agree that if more time spent vetting the Leaf could have avoided some of the early problems.

Yes the vaporware tactic may have knocked out some players, but Ford, VW, Hyundai, etc. have an EV game plan.

I think the reservation system could work, but obviously the excecution needed some tweaking.

Nissan came rushing out of the locker room with all eyes on them, and they managed to trip and fall and injure themselves in the process. They are gonna have to come back with a good game to erase that image. Personally I am rooting for them.

[Herm]

You should root for Nissan, God knows how many $$ billions they will spend setting up 6 factories.. on the other hand Ford spent $0.50 to to ask Magna to do a Focus.. actually I dont think even that much, Magna initiated the whole deal.

The Focus BEV may be a 5 seater but its not a family car without trunk space. Magna could have done a better job there.

[Charged Up]

Originally Posted by Herm

You should root for Nissan, God knows how many $$ billions they will spend setting up 6 factories.. on the other hand Ford spent $0.50 to to ask Magna to do a Focus.. actually I dont think even that much, Magna initiated the whole deal.

The Focus BEV may be a 5 seater but its not a family car without trunk space. Magna could have done a better job there.

Well one view is that Ford is cheap, or lacks experience, by choosing Magna to supply the electric powertrain. Another view would be that Ford saved itself and us billions by choosing a supplier who had a powertrain ready to go. Boeing doesn't make its own engines, and yet somehow they managed to be the best airline manufacturer in the world. So good that all of Europe had to team up and subsidize a company to "compete."