Nissan is reaping fruits of cutting prices of vehicles in May

Article by Anita Panait, on July 6, 2013

Nissan’s move to cut factory prices of a number of its popular nameplates in May 2013 is now bearing fruits. Dan Mohnke, Nissan's director of marketing operations, remarked that the price cuts are leading into lower incentives and higher residual values without hurting transaction prices.

As reported to J.D. Power and Associates, Nissan's average per-vehicle incentives were $2,088 in June, which is $539 per vehicle lower than in April. Mohnke says that transaction prices are $231 higher.

In June 2013, the average transaction price was $24,114 per vehicle, compared to $23,883 per vehicle in April. Mohnke remarked that Nissan is right where they “intended to be."

He said that they lowered their visual prices to the consumer without affecting our transaction prices. Nissan trimmed prices of seven of its best-selling nameplates: the Altima, Maxima, Rogue, Pathfinder, Sentra, Murano and Armada.

The move was done to get vehicles more in line with rivals on Internet shopping sites as online search engines typically provide results grouped by price. Nissan was worried that several models were priced too high to appear near the top of search results.

Nissan’s move, however, created an issue when critics claimed the price cuts were evidence that the carmaker was using the recent depreciation of the Japanese yen to gain a competitive advantage.

Mohnke countered that the models which prices were trimmed -- except the Rogue and Murano are built in North America – which means they do not benefit from the yen's exchange rate. He noted that Nissan is shifting output of the Rogue and Murano to the United States.

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