Nissan cuts car prices to help improve web searches

Nissan is cutting prices on seven of its 18 models in the U.S., hoping its cars and trucks will show up in more internet searches by shoppers.

7 of 18 models in U.S. to drop in price immediately

A visitor inspects a Nissan SUV at a gallery inside the headquarters of Nissan Motor Co. in Yokohama, Japan. The company said Wednesday it is cutting prices on seven of its 18 models in the U.S. (Koji Sasahara/Associated Press)

Nissan is cutting prices on seven of its 18 models in the U.S., hoping its cars and trucks will show up in more internet searches by shoppers.

The price cuts vary with the amount of equipment on each model. They run from 2.7 per cent, or $580 US, on the top-selling Altima midsize car to 10.7 per cent, or $4,400, on the Armada big SUV. Executives are under pressure to sell more cars, with Nissan's CEO targeting a 10 per cent U.S. market share within three years.

Nissan is also cutting prices on the Sentra compact car, Juke small crossover SUV, Murano midsize crossover, Rogue small crossover and the Maxima full-size car.

Jose Munoz, Nissan senior vice president of sales and marketing for the Americas, said the seven vehicles account for 65 per cent of Nissan's U.S. sales. The sticker prices, he said, were higher than similar models from competitors, and that kept Nissan vehicles out of some internet searches.

"In some of the customer searches we may not appear," Munoz said. "We want to be considered by as many customers as possible."

Nissan-Renault CEO Carlos Ghosn has set a goal of taking 10 per cent of U.S. sales by 2016 or sooner. In the first quarter, Nissan's sales fell 1.3 per cent. Its share of the U.S. market was 8.6 per cent, according to Autodata Corp.

The company plans to reduce rebates and other discounts to offset some of the price cuts. Nissan is facing intense competition from U.S.-based automakers and its prime Japanese competitors, Toyota Motor Corp. and Honda Motor Co.

The price cuts are effective Friday for cars and trucks that aren't yet on dealer lots. However Nissan will also make allowances to trim the prices of cars currently in dealer inventories. The cuts will remain in effect indefinitely.

The price cuts should help Nissan build on strong April sales. The company reported a 23 percent increase for the month on Wednesday.

Cuts driven by weaker yen, analysts say

Although Nissan denies it, industry analysts say it can afford the cuts because of efforts in Japan to weaken the yen against the dollar. That makes cars and parts made in Japan cheaper than goods made in the U.S. One analyst predicted a price war if other automakers follow.

"If the yen stays where it is at and competitive pressure does as well, we could be looking at a more widespread battle for buyers," said Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit forecasting firm.

Nissan's Munoz denied the yen influenced Nissan's decision, saying that four of the seven affected models are made in North America. Only the Juke, Rogue and Murano are made in Japan, and their sales are small compared with the other models.

Nissan builds about 75 per cent of its cars sold in the U.S. in North America. That should rise to 89 per cent by the end of next year when the company shifts production of the Rogue and Murano.

Ford's U.S. sales analyst Erich Merkle wouldn't comment on Nissan's pricing. In April, he said, the industry saw little evidence that the weaker yen was affecting prices, which were down about $170 per vehicle compared to last April.

"The pricing seems to be very contained," he said.

Nissan isn't the first automaker to cut prices this year. In January General Motors trimmed $300 to $770 off the sticker price of its slow-selling midsize Chevrolet Malibu.