- Nissan used to be among the Big-3 in ASEAN, now overtaken by Mitsubishi
- In the 2000s, Nissan took over local distributors in Thailand and Indonesia, believing it can do a better job themselves
- Today, Suzuki and Dongfeng outperforms NIssan in Indonesia, Mazda sells more than Nissan in Thailand
Once ranked among the top 3 biggest Japanese car brands in South East Asia, Nissan is now only a second-tier brand in key ASEAN markets of Thailand, Indonesia, and Malaysia.
In Indonesia – the largest car market in the region with 887,202 units sold in 2021 – Nissan is not even in the top 10, having been pushed down to 12th spot (3,177 units), outdone by Wuling (25,564 units, 8th) and DFSK (3,242 units, 11th).
Even tiny Suzuki does better, with 91,793 units, at 4th place, behind Mitsubishi’s 107,605 units.
It's a big fall from grace. Ten years ago, NIssan was in 6th place, selling 67,143 units units in 2012.
Mitsubishi is now ASEAN's third biggest car brand, behind Toyota and Honda, overtaking Nissan
In Thailand, which sold 759,119 vehicles in 2021, Nissan has fallen down to fifth place (29,696 units), outdone by even Mazda (35,385 units).
It’s quite embarrassing for Nissan to be outdone by Mazda because Mazda is positioned as an affordable premium brand, one that emphasizes craftsmanship and the love for cars over producing high volume models like Honda or Toyota, cars that try satisfy everyone.
Globally, Mazda is only 1/4 of Nissan, but in Thailand, it is Nissan that has no idea about what it is doing
Over in Malaysia, Nissan sold 12,287 units last year, dropping down to 6th place, overtaken by Mitsubishi (17,489 units, 5th).
Nissan is one of the earliest Japanese brands to setup business in this region. With the advantage of being an early mover, NIssan was then the most trusted and best-selling car brand in South East Asia regardless of country of origin.
It was the Datsun Sunny that first introduced this region to Japanese cars, not the Toyota Corolla
It was Nissan (specifically Datsun), not Toyota who started the Japanese car revolution in this region.
Cars like the Datsun 1000 (B10, origin of Nissan Sunny / Sentra) forced Western brands to pack up their bags and go home, proving to the public that Japanese cars are more economical, offer better value, and most importantly, are far more reliable than an equivalent Ford, Volkswagen or Opel.
Before the Hilux became popular, it was the Datsun 620 pick-up that moved South East Asian businesses
Before the Toyota Hilux was even a thing in Thailand, it was the Datsun Sunny pick-up that moved Thai businesses.
In Malaysia, Nissan appointed Tan Chong as its distributor in 1957, at a time when Toyota wasn’t even heard of and would not appoint a distributor until 1960 (Kah Motor, which later gave it the distributorship to focus on Honda motorcycles, and later cars).
Under the Tan Chong group, Nissan, then known as Datsun, was king from the '60s to '80s
In Thailand, Siam Motors began local assembly (CKD) of Nissan cars in 1962, two years earlier than Toyota, and decades earlier than Honda.
At its peak in the ‘80s, the Nissan Sunny 130Y was outselling Toyota Corollas and Honda Civics across the region.
Siam Motors was Tan Chong's equivalent in Thailand, also a family-run business. It opened a Nissan assembly plant years before Toyota, decades before Honda
So what went wrong?
The root cause of Nissan’s problems in Malaysia (and the rest of South East Asia) runs deeper than most casual car critic care to understand. It is worth noting that Malaysia’s Edaran Tan Chong Motor is Nissan’s best performing Nissan distributor in the region, after adjusting for market size.
Critics will find this hard to understand but Nissan acknowledges that ETCM is the region's most successful Nissan distributor. Carlos Ghosn says the problem with Nissan lay elsewhere
Even former Nissan CEO and ex-chairman of the Renault-Nissan-Mitsubishi Motors Alliance Carlos Ghosn admitted that Nissan doesn’t understand South East Asia and has been doing a very poor job here.
Taking Thailand as an example, Ghosn explained in his book ‘Broken Alliances – Inside the rise and fall of a global automotive empire’ that the problem with Nissan in South East Asia is a problem of its own talent pool.
Carlos Ghosn, before he fell victim to a coup and became a wanted fugitive
“Siam Motors was a family company we bought that had not been run very well in the past. The Nissan executives we sent there didn’t really succeed. It was a culturally difficult environment for our Japanese colleagues. They had to compensate individual weaknesses with collective action – that’s the great strength of Japan. But it’s hard to get the same results abroad. The Japanese work very hard, display great loyalty to their company and communicate very quickly and smoothly with each other. These qualities count enormously in industry. However, brilliant individuals are pretty rare, undoubtedly because the education system and society doesn’t let people emerge and stand out,” said Ghosn, referring to Japanese culture that values conformity over individuality.
Broken Alliances is a sequel to Shift. The former was written when Ghosn was Japan's rock star CEO, the latter is Ghosn as a wanted fugitive
Siam Motors was Nissan’s distributor until 2004, when Nissan took control of it as well as its local manufacturing joint venture Siam Motors & Nissan Co.
Prior to the takeover, Nissan’s market share in Thailand had been steadily falling for 20 years, with its plant utilization at just 30 percent.
“For us, this is not acceptable. Not only has our volume decreased, our customer satisfaction and the overall power of our brand in Thailand have not matched our performance globally,” said Ghosn in 2004.
Nissan thought Siam Motors was doing a terrible job and took over the business, only to realize that its own executives actually made things worse
At that time, Nissan thought it knew better, told the locals to keep their hands off the business and parachuted its own Japanese executives in.
Far from improving Nissan’s fortunes in Thailand, Nissan’s own people actually made things worse. In 2003, Siam Motors sold 43,557 Nissans (8.1 percent market share). Last year, Nissan Motor Thailand shifted just 29,696 units (3.9 percent market share).
Prior to taking over Siam Motors, Nissan had also took over the Indonesian distributorship from PT Indocitra Buana in 2001 for the same reasons it took over Siam Motors.
The poor results then already offered a crystal ball to Nissan’s impending failure in Thailand.
Nissan was aiming for 100k sales by 2013, it ended 2021 with just over 3k sales, makes ETCM look like an overachiever
Nissan’s attempt to introduce a range of low cost cars under the Datsun brand in Indonesia (and India) proved to be incredibly stupid and it’s a reflection of how poor Nissan executives understood this region, where income levels are low but aspirational values are sky high.
The Datsun brand is now no more. Nissan's Japanese executives had assumed that the same formula that worked for Dacia in Eastern Europe will also work for Datsun in South East Asia.
Nissan had one great product that hit all the right notes though, the Nissan Grand Livina. But it was a one-hit wonder because development of a successor model took a backseat as Nissan prioritized development of products for China, USA, and the Middle East.
Nissan's one-hit wonder, whose replacement came too late. With weak, ageing products, there's nothing much that local distributors can do
By 2019, Nissan shut down its plants in Indonesia, reduced its dealers and headcount, to become an import-only brand. Meanwhile, Toyota’s Daihatsu is building success after success in segments where Datsun failed.
Where Nissan failed, Mitsubishi doubled down on its focus on this region by introducing the (also sold as a rebadged Nissan Grand Livina in Indonesia under contract), which is now strong enough to harass the in Indonesia.
Mitsubishi is a late-comer in the budget 7-seater segment, didn't stop the Xpander from chasing down the all-conquering Toyota Avanza
In Thailand, the Nissan Almera and March were one of the first to take advantage of the Kingdom’s EcoCar incentives. Both were fairly OK cars when they were introduced but you could that these are products made by people who are not really motivated.
The previous generation Nissan Almera (Sunny elsewhere) is product that shows how demotivated the people at Nissan were
So when Honda joined the competition with the Honda Brio and Brio Amaze, followed by Toyota Yaris and later the Yaris Sedan (Vios to you and I, but with a smaller 1.2L engine), it was game over for Nissan.
Honda Brio Amaze showed Thais that cheap cars don't have to be dreadful to own / drive
Likewise for the Nissan Frontier and later the , which kept dropping down the sales chart with every new generation / model update launched, while the and just kept leaping forward, never mind the all-conquering Toyota Hilux.
Nissan Frontier / Navara has been losing market share with every new model launched
Nissan’s problem is not just in sales and marketing, but also in manufacturing, which Ghosn admitted to be poorer than Mitsubishi Motors, at least in South East Asia (elsewhere, Mitsubishi Motors’ turnaround under the Alliance was done by benchmarking Nissan’s plants, especially in parts purchasing).
“Mitsubishi was better than us in Thailand, including manufacturing,” said Carlos Ghosn.
“We relied on them to turn Siam Motors around. Plants would not be transferred from one company to another but there are numerous ways to improve things like benchmarking, better distribution of roles, and so on.”
Carlos Ghosn and the late Osamu Masuko of Mitsubishi Motors. After more than a decade of underperformance, Nissan acknowledges that it doesn't understand ASEAN and needs Mitsubishi's help
Although Mitsubishi Motors was weaker than Nissan in Europe and USA, it was doing a much better job than Nissan in South East Asia, which Ghosn explained was also why Mitsubishi was such a good fit to extract synergies from the Alliance.
Nissan’s worsening performance in Thailand and Indonesia is also why the company is very grateful that Edaran Tan Chong Motor (ETCM) is still holding the fort in Malaysia. Nissan knows it cannot do a better job than locals like ETCM who understand the market better.
One of the reason why Nissan is failing in ASEAN is because Nissan's best and brightest are assigned to look after USA, China, and Middle East, in that order. The ones managing ASEAN over the last 2 decades have been underperformers
Keep in mind that as far as Nissan is concerned, the volume potential of Malaysia’s car market is actually a lot smaller than the 508,911 units sold in 2021, because is controlled by our quasi-national car companies Proton and Perodua.
Considering the smaller market, ETCM is actually outperforming Nissan-owned distributors in Thailand and Indonesia, with a 5.9 percent market share in non-national cars segment, higher than Thailand’s 3.9 percent and Indonesia’s 0.3 percent.
To say that the Nissan brand will be better represented in Malaysia if Nissan themselves run the business instead of Tan Chong is an incredibly naive opinion, as shown by the worsening results by Nissan's own channels in Thailand and Indonesia.
Post-Carlos Ghosn’s ouster, Nissan is not any stronger than before, the Alliance has no clear direction, and is at risk of breaking up. When that happens, Nissan’s turnaround with Mitsubishi Motors’ assistance might just stall.
Tied to a weak manufacturer, ETCM has little choice but to soldier on with minimal support. Yes, the latest generation Nissan Almera is the best budget sedan currently on sale in Malaysia but it takes more than one winning product to turn around decades of lackluster performance.
On its part, the Tan Chong group has been working hard to reduce its reliance on Nissan.
In Vietnam, the company is making great strides with China’s MG brand. No other car company in Vietnam has managed to set up a dealer network from scratch as fast as TC Services – 20 dealers in just one year.
Starting from zero, Tan Chong has made MG Vietnam's fastest growing brand, signing up 20 dealers in one year!
Tan Chong has just launched the in Vietnam, a C-segment Civic-size sedan but priced like a Nissan Almera.
Despite the pandemic, TC Services Vienam had increased sales of MG cars there by 20 percent, albeit just 4,086 cars but remember that this is only the company’s first full year of operation.
There’s still no indication on whether will Tan Chong be appointed as the distributor for MG in Malaysia but the company has also inked deals with commercial vehicles specialist .
Keyword: Carlos Ghosn explains why Nissan is weaker than even Mitsubishi in South East Asia