Jason noticed that NIssan is eyeing the under 10KL car market. Well boys and girls (here he goes again, sigh) years ago about 1968-69 I wandered into the BMW Nissan dealer on Lamar in Austin Texas. I could not understand why the Datsun 510 with the same basice tech specs was about $2500 and the BMW 1600 was about 3500-4000. The salesman thought of course I simply did not appreciate German engineering. Well that simple car put Nissan on the map, and later the 240 Z in 1972 really got things going. A similar Sentra 2.4 L is more like 18-20 grand these days to I expect we will really be going down market for a 10 K car though clearly the KIA Rio has the inside track at the moment. This will take everything we have learned in cost accounting and then some. And so it’s back to the future of the old Model T, the VW Beetle the Datsun 5140 and the Toyota Corolla, let the games begin, we should all be the winners.
Professor Elam
Accounting & Investing Info for San Antonio A & M
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4 responses to “Nissan Goes DownMarket”
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I am shocked and at the same time not suprised that U.S. manufacturers have so far ignored the potential market (U.S) for cars priced under 10,000 dollars. Look at the success of other low-cost market leaders and one would wonder why our own manufacturers have so far ignored the market of cheap cars (i.e, Walmart and Southwest Airlines). Along with the rising prices of gas, I think the cheap market will be a boom once they hit the market here in the states. I wonder what the mpg gallon rating is on these cheaper cars, given that they are being designed to top out around 80 mph, which is requiring smaller engines, thus making them more fuel efficient. Not only will you be saving a tremendous amount of money on your purchase of these “cheap” cars, but also just imagine the fuel savings that will come along with it. Like the Texas Rangers and their pitching staff (how many games are they willing to lose by poor pitching performances before they will eventually invest into some good pitching), how much of a hit are the big 3 willing to take before they will tap into the “cheap” car market? Hopefully they wont let it get to that point, but seeing how our foreign competitors are are in the works, I think it is time for the big 3 to jump on the bandwagon if they wish to remain competitive in the market.
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I like the Rangers analogy…ha ha. I have been a Yankee fan for years because of that. In ACCT 5130 we have discussed process re-engineering as a possibility for improving costs in a particular area. Sometimes…not often though….it is necessary to say….UNCLE….and start over.
What is the definition of insanity? Doing the same WRONG thing over and over with the same result. The airlines don’t get it….SW does. The Big 3 don’t get it….Toyota does.
THE TRUTH HURTS…..there is no sympathy in the business world.LikeLike
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Perhaps the best example of process re engineering is the Dallas Cowbooys under Landry after Jones bought the team. Landry had a five year plan I think it was to turn things around, Jones fired Landry, Hired Johnson, he won the Super Bowl in three. And then of course Jones decided he knew more than Johnson and Johnson left, classic American business….and the Cowboys have been in the cellar ever since.
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Although a $10,000 car does sound nice for the US, I’m not sure if it would be a huge hit here. Americans typically splurge on their cars regardless of their financial situation. Nissan does currently offer a car for $12,700 called the Nissan Versa, which is offered in a hatchback and a sedan. The car is actually a nice car for the money and is faster than one would think. Plus, America has very strict saftety and crash test requirements that a car costing less than $10,000 might not be able to meet. In Europe last year I saw tons of really small two passenger Mercedes diesel cars zooming around. I thought they were so cool until my aunt told me they were over $20,000. If Nissan makes a car for under $10,000, it better be very appealing.
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Professor Elam 
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