Nissan retreats to ICE sales in China
Japanese OEM calls EV price war with Chinese firms "crazy"
Japanese OEM Nissan has stopped competing with domestic EV manufacturers in the Chinese market, instead choosing to focus ICE vehicle sales, the firm says on its Q3 2023 results.
Instead of engaging in a price war with cheap small- and mid-size EVs being sold by firms such as BYD in big cities such as Shanghai and Beijing, Nissan focused its strategy on sales of ICE vehicles in smaller cities with less EV infrastructure.
“The price war, to be honest, is a bit crazy,” says Nissan CFO Stephen Ma. “Instead of trying to fight them in those very fierce markets, we turned our focus to markets where customers still prefer very much more ICE [vehicles].”
Nissan does not break out its figures for EV sales as a ratio of overall sales in China, but saw a 26pc fall in total vehicle sales in China to 547,000 units in the first nine months of 2023, compared to the year ago period.
Sales of Japanese EVs in China have fallen as firms have struggled to compete with state-subsidised domestic manufacturers.
And Mitsubishi suspended production in China indefinitely in mid-July amid plunging sales.
Nissan plans to release a more competitive new energy vehicle in China next quarter, and has plans for even more competitive models in the mid-term which it will announce before the end of March.
“We already started very seriously on working on a much more detailed offering, a comprehensive offering for the China market,” says Ma.
Amid its problems in the Chinese market, Nissan has invested $663mn in Renault’s EV unit Ampere alongside Mitsubishi in an effort to gain the global scale necessary to improve its fortunes in EV sales.
Renault cancelled the IPO of Ampere last month amid poor market conditions.
But the cancellation would not affect Nissan’s plans to roll out new EV models in Europe, according to Ma.
“Our collaboration project with [Ampere] is progressing as planned,” he says. “A compact EV will be developed by Ampere for us according to our specs...I cannot tell you the timing of it, but it will come soon.”
Demand for the EV versions of the Nissan Qashqai, X-Trail and Juke led to these vehicles forming 48pc of all Nissan vehicle sales in Europe in the fourth quarter.
In addition to the compact EV, Ampere is developing further models that Nissan can sell into the European market in the long term.
“It's a good way to collaborate to help us meet the very fast electrification trend in Europe,” says Ma.