Exclusive: Nissan mends fences with dealers

NISSAN Australia has spent the past 18 months mending relations with its 194-strong dealer network, following a period of negativity and mistrust stemming from a disruptive oversupply issue.

As GoAuto reported in October 2013, Nissan Australia’s issues with oversupply of vehicle stock had caused anger among dealers, although reports that the company was terminating dealers for refusing to take more cars than they could cope with were rejected by interim managing director and CEO Peter Jones.

When Richard Emery took the reins early in 2014, he declared priority number one was to mend the relationship with the dealer network, with a key element of that involving fixing the overcrowding of unsold cars at dealers, at Nissan HQ and at other locations where cars were being held “on grass”.

In an exclusive interview with GoAuto last week, Mr Emery said he was aware of the fractured relationship between Nissan Australia and its large dealer network before he started the role.

“If there was anything that was daunting, it was the mental environment that was in the organisation and the relationship with the dealers when I arrived,” he said.

“I read some of the stuff that was out there and I spoke to some dealers and I had a feeling things weren’t great. Let’s be honest, your relationship waxes and wanes over time with any franchise, so I suppose it was at a low point. It was probably lower that I thought when I got here.” Mr Emery said some of the things impacting that relationship were “easy to fix”, such as slowing supply from the factories or halting future orders, but the dealers were after more.

“What the dealers were seeking from us was: consistency, openness, transparency, and the business philosophy, it was about saying this is how we are going to do business.

“That doesn’t work if it is just words, you have to start acting like that. And I would say within a quarter, the dealers said, ‘Okay, so Nissan are going to run the business like this, they are sticking to that.’ And our business habits changed quite quickly.”

Mr Emery said that a large percentage of dealers slowly embraced changed business practices within Nissan Australia, but added that there was still some apprehension from retailers this year.

“In terms of building back confidence, dealers were wanting to see the walk rather than the talk. They wanted to see the walk longer than I expected. I had conversations with dealers three months ago saying, ‘Yeah, but you will do this again.’ And I said, ‘Hang on, we haven’t done that for nine months, how many more months do I have to not do that for you to trust we are not going to do it?’“There were pockets of the network (where) it took longer to convince them that this is the type of business we are going to do, this is what you want us to do.”

Mr Emery said many dealers in the network continue to be upfront with him regarding Nissan’s recent woes and its shifting internal priorities, but suggested that most would agree the company was on a positive path.

“From the dealers I have spoken to in the last month, whether through dealer council or dealer visits, I think we are in a really good space with our network. Are there still some frustration spots? Of course, and you get that with any franchise relationship.

“I would say the network would say they (Nissan Australia) are absolutely on the right track, they are going about it the right way, being consistent and transparent, a few things we are not comfortable with but at least they are listening to us and talking to us and I think that’s a good outcome a year down the track.”

Under Dan Thompson’s stewardship from 2008 to 2012, a number of regional dealer liaison roles were cut, removing years of accumulated knowledge by replacing the staff with people from outside the automotive sector.

Mr Emery acknowledged that some retail area staff were reluctant to visit the dealerships they were responsible for during the tense period, but said this had shifted in the past 18 months.

“It’s a more confident relationship and position. Because of how difficult some of the business circumstances or relationships were between us and the dealers, I think some of our staff were … avoiding going to visit dealers because, ‘I haven’t got any good news and it’s all going to be ugly’.

“Whereas I think (now) they are happy to boldly walk into a dealer and say, ‘How can I help you with your business?’ That alone has improved the relationship in itself.” Shortly after commencing the role, Mr Emery discovered plans to increase the dealer network beyond 194 sites as part of the previous “ambitious volume planning”, and quickly halted the expansion.

“We made a position that we would not go beyond that 200 number. I stalled any future actions until we sorted out what our business was really going to be in the future,” he said.

“Once you know what it is going to be at a sustainable level, how many dealers do you need to work with that?”