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Nissan’s reform plan for sales networks makes dealers worried

5, 07. 2007

   Nissan Motor Co., Ltd. has worked out a plan to reform its sales networks aiming at getting out of its sales slump and moving toward future expansion. But the firms dealing with Nissan cars are expressing doubt about the “zone supervisor system” that will be newly introduced as a measure to support the dealers. The main factors for the sluggish sales of Nissan cars are marketing of new model cars at a wrong time and the continued absence of new model cars designed for mass selling. The dealer firms are aware of these shortcomings, and that is why they have craved for introduction of new model cars that can be sold fast rather than the planned reform. Nissan has chosen, however, to take steps to strengthen the sales shops. The dealers hold that the reform plan is a counter-progressive measure, and they are increasingly worried.

Dealers object to direct leadership of main company to sales shops

Doubt cast on Nissan’s zone supervisor system
Doubt cast on Nissan’s zone supervisor system

   Nissan has introduced the regional company system by dividing the entire country into 10 different zones since the beginning of April 2007. The self-capitalized regional dealer firms, totalling 86 in number throughout Japan, are to remain the same as they are. But a total of 52 other dealer firms which are under direct management of the Nissan main office will be placed under the management of unified supervising company to be set up in each of the 10 zones. For zone supervisors, Nissan plans to recruit 300 people from the dealer firms and other places, and they will be assigned to the unified supervising company to be established in the zones.

   Nissan’s domestic sales system consists of 138 directly managed and self-capitalized regional dealer firms made up of a total of 2,400 sales shops. Even though some of them are in the same commercial area, there are differences among them in their sales methods and customers’ patronization. It takes too much time to strengthen the sales ability of the shops by resolving the weak points of each of the shops if such efforts are continued to be made through the management headquarters of the dealer firms. That is the reason why Nissan has concluded it would be necessary to directly manage the shops.

   Under the zone supervisor system, the zone supervisors to be stationed throughout the country will give advise directly to the shops on the sales methods and ways to improve their customer satisfaction (CS). Each of the supervisors will take charge of about 10 shops. The executives of the dealer firms do not like the new system as the advise would be made over the head of the management headquarters of the firms which are operating the shops. Furthermore, the supervisors will give advise to all the shops in the zones they will take charge of, regardless of whether they are within the frame work of directly operated or self-capitalized regional dealer firms. The shops themselves also want to prevent their sales know-how from being leaked by the advisors to other shops of nearby areas. Even though they sell the same Nissan-made cars, the shops are rivals to one another.

“Re-arrangement of the past mistake for re-introduction to the present”

   Each dealer firm and shops have their own sales methods and know-how to improve the CS, and ways of doing things handed down from generation to generation. It is worried that the leadership under the zone supervisor system might result in the ignoring of the tradition, lowering of the shops’ pride and a consequent decline in sales.

   At one time between the 80’s and 90’s, Nissan employed the regional management system in its domestic management division, under which the flow of the leadership changed from the “vertical type” to “horizontal type”. The new system then did not succeed and the leadership flow was changed back again to the vertical type. An executive of the dealer firm who remembers the management system change of that time severely criticized by saying the zone supervisor system is only a “re-arrangement of the past mistake for re-introduction to the present.” The main reason for the failure of the regional management system introduced at that time was, he noted, the unreliable ability of the personnel sent by Nissan in providing necessary information and leadership, Nissan’s attitude toward the dealer firms, and the sense of uncertainty held by the dealer firms toward the main company.

   The executives of the dealer firms say Nissan is trying to take over the sales know-how from the dealer firms because it does not have such know-how of its own. The first batches of zone supervisors to be appointed under the new domestic sales system reform are to start working in the Tokai (Pacific coastal) region in June. Success or failure of the zone supervisor system seems to depend on the ability of Nissan to recruit necessary personnel who can be accepted by the shop staffs whose pride is high.

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