Nissan 2006 Annual Report Download - page 27

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Nissan Annual Report 2005 25
RUSSIA
Two years after January
2004 when we started
commercial operations in
Russia as Nissan Motor
Rus, our sales had already
reached 46,500,
representing a 63 percent
gain over the previous
fiscal year. Four new
models helped to drive our
performance: the 350Z, Pathfinder, Murano and
Navara. Nissan’s strong brand presence permits
us to keep our retail prices at a good yet
competitive level, allowing for sustainable profit.
Several external factors helped generate the
increase. High oil revenues and gas and other
natural resource exports brought sustained
economic growth, creating a powerful demand for
vehicles, particularly foreign brands. Japan’s brand
image among Russian consumers is excellent, and
Nissan has a particularly good reputation for quality
and performance. In fact, the Navara was just named
2006 Car of the Year.
Internally, we control our sales expenses very well
and don’t spend much on incentives. Our supply
chain pipeline has been streamlined. We’ve been
quite aggressive in our marketing, too, increasing
communications and advertisements. We’re working
hard to develop a wider sales network and present a
product lineup that fits Russian conditions and local
consumer requirements. The number of models is
still relatively small, but we’re selling a lot of each.
Our product mix has helped. The 4x4s account for a
good portion of our sales and provide better profits
than regular passenger cars.
Dealer margins are another factor. In Russia, the
gross dealer margin is much lower than in Western
Europe, primarily because sales expenses are
comparatively lower and volume is bigger per dealer.
Nissan also strives to keep dealer numbers low and
go with big dealerships. Reflecting that, our top
dealer in Moscow, the largest market in Russia, sold
close to 5,000 cars last year, and the average was
around 2,500.
Right now we have thirty-two dealer partners,
some of whom have more than one outlet. We’ve
also got quite an aggressive network expansion plan.
We intend to add ten dealerships this year, and do
the same next year. We already have good partners
in Moscow and St. Petersburg, so the task is to find
equally good ones as we expand into the regional
markets, including Siberia. Last year we also started
sales in the Ukraine.
We’re quite selective and demanding about
dealership appointments. Thanks to Nissan’s good
reputation, we don’t have any problem attracting new
partners. We spend a significant amount of time
assessing candidates. We visit the city, check the site
the candidate has in mind, and examine their
financial resources and management team. Once we
award a franchise, we support it well. Even in the
Profitably Riding a New Market Surge
TORU SAITO
Managing Director
Nissan Motor Rus
GEOGRAPHIC EXPANSION
PERFORMANCE
Aurora Auto in St. Petersburg Pelikan-Auto in Moscow Navara was named 2006 Car of the Year