Nissan accelerates digital transformation to sell more vehicles

Car maker Nissan is embarking on digital transformation to sell more vehicles during the Covid-19 pandemic, Reuters reported.
Nissan at a trade eventAshwani Gupta, chief operating officer, is spearheading the digital journey to attract more users for its vehicles.

Yasunobu Matoba is the CIO of Nissan. Yasunobu Matoba replaced Tony Thomas who left the auto-maker in March 2020.

Nissan believes investment in digital would enable consumers to research cars online, have models delivered to their homes for test drives and make purchase plans without visiting a dealership, if they chose not to do so, Reuters reported.

The number of cars sold via Nissan’s websites in China, Europe and North America combined accounted for 11 percent of the company’s overall sales in those markets in the first half of this year.

That compared with 4-5 percent in the same period last year, though digital volumes were not as closely monitored then.

Some of the details and data are expected to be shared during a news conference on Nov. 12 when Nissan announces results for its fiscal second quarter ended Sept 30. Japan’s second-largest carmaker has warned of a record 470-billion-yen ($4.5 billion)loss this fiscal year ending March 2021.

The latest IDC report on digital transformation said 50 percent of enterprises will implement the organizational culture optimized for DX in 2025, based on customer-centric and data-driven.

By 2022, 70 percent of all organizations will have accelerated use of digital technologies, transforming existing business processes to drive customer engagement, employee productivity, and business resiliency, IDC said.

A Nissan spokesman in Yokohama said there was strong demand for online shopping, which had become “irreversible with COVID-19” and the firm was addressing this in partnership with dealers.

“Nissan’s Shop at Home experience puts customers in control at every step of the journey: to choose to shop both online and at physical dealerships,” he added.

The company’s drive is initially focused on North America and China, its biggest markets where digital sales are more advanced than elsewhere, according to the sources.

In the United States, online customers can search for a specific car from the inventories of all Nissan stores in a given area, not just one store’s stock.

In China, consumers can’t do the same, but they are open to buying cars online; in the first nine months of this year, 17 percent of the roughly 758,000 new Nissan cars sold there were bought online.

They are what Nissan defines as digitally-acquired buyers, who visit the company’s main e-commerce sites — Chebaba in China and NissanUSA.com — and leave their contact information, and then complete purchases either completely or partially online.

Shifting more sales online is, however, a big challenge for the industry because it deviates markedly from the familiar showroom strategy, and could face resistance from franchise dealers, who have a symbiotic relationship with carmakers.

The digital drive is viewed by senior executives as being beneficial from a profitability angle because online sales allow the company to reduce operational waste in distributing and marketing cars, and improve data-gathering, two sources said.

For example, this summer Nissan opened a dedicated website for the new Ariya electric sport-utility vehicle, due to be launched globally next year.

In the first four days, 1.2 million people visited and Nissan learned, as customers gave their preferences, that the most popular features globally were a lounge-like interior and connected services, according to the senior Nissan executive.

In Europe the most favoured colour was a two-tone black and Akatsuki copper option.

56 percent of European visitors preferred the four-wheel-drive version and 18 percent the two-wheel-drive, while the rest were undecided or did not leave preferences. U.S. customers were more evenly split between the two drive options.

Chee-Kiang Lim, China managing director of Detroit-based consultancy Urban Science, said legacy carmakers were lagging pure electric vehicle companies in terms of online sales, with Tesla, NIO, XPeng and WM the leading digital players.

Mass-market players like Nissan, Toyota and Volkswagen are most advanced in China, with concrete initiatives to push online sales.