Retail strategies are the plans car makers use to sell cars, like setting prices and offering special deals.
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Welcome to Daily Drive for Wednesday, December 24th, 2025. I'm Kellan Walker in Las Vegas today on the show. We continue our annual series of conversations about the biggest stories of the past year. With a look at two of Japan's biggest automakers throughout 2025. Tomorrow on the show, we'll talk all about Toyota. We kick things off today. With a look at the long list of struggles that Nissan had throughout 2025. Joining me?
Our automotive news, Atlanta Bureau Chief, Irvash Kakaria, as well as Toyota and Subaru reporter, Larry Velliquette. The Nissan crisis and failed Honda merger, Irvash. Nissan had its worst loss in 25 years. It launched a revival plan and then merger talks with Honda Collapse. Help us understand what went wrong. Yeah, so Nissan has had a pretty interesting year. Like I've said, you know, they just can't seem to catch a break on many occasions.
So, you know, as you just noted, they had their worst annual loss in 25 years, so a quarter of a century. And late last year, they were in talks, sort of merge or do some sort of long term deal with Honda. And that fell through. So now, you know, Nissan's going in alone. They're undergoing a major austerity plan, both globally, but also in North America, which is their largest market. In North America alone, they're looking to cut about two billion.
That's going to lead to, you know, they've already they've already cut hundreds of jobs through voluntary buyouts. They've closed two plants in Mexico. So as to, you know, maximize production in in America in North America.
And, you know, they've taken, they've taken several other measures to try to get the, the business back on track, whether, you know, how long these, these, these moves, these measures will take to have a meaningful result is not known. But clearly, Nissan doesn't have time on its side.
It doesn't have a cash flow issue right now. It does have a considerable war chest plus it can borrow just because it's so critical to the country to Japan.
But, you know, at some point, if they can't increase their market share, especially in America, it's going to become a, you know, a challenge.
Well, Irvash, I've asked this question. I want to say, gosh, maybe earlier this year. But now, you know, going into 2026, is Nissan salvageable at this point? Or are we watching a slow motion collapse?
Yeah, no, I think it's definitely salvageable. I hope it's salvageable for my own selfish interests because Nissan is such a, you know, a news generator. But, no, I think it's exaggerated to say that Nissan's going out of business.
I still think that it has the heritage. It has the talent to fix its business here. I think one of the big challenges they faced in America is that for the past few years, they've had a pretty much a dated line up.
That's changing. They're coming out with new models. They miss the hybrid boom that Toyota absolutely leveraged to success. But they're finally bringing their, their wave of hybrids.
And they're also entering, you know, new segments that they were not in. So they're making the right moves. The question is, can they execute on it?
Can they bring these products to market on time? And can they bring it competitively? And ultimately, that will decide whether, you know, these guys have a future or whether, you know, they get eventually acquired by some other company.
And why did the Honda merger fall apart? Now, was it ego or was it legitimate business concerns?
So, you know, I think that from what I've understand from the folks have spoken with inside Nissan. I think it was a combination of factors. I think they're fundamentally the two automakers, especially on their R&D and manufacturing departments or sides, they come to manufacturing in R&D from two different schools of thought almost diametrically opposite.
And so there was some kind of friction between the two departments or those areas of the business in terms of how do we work together?
So there was definitely a cultural component to it just because they were both Japanese companies doesn't mean that they would get along. So that was one issue. The other issue was a question of urgency, you know, Honda wanted Nissan to move much faster in fixing their business, making the hard decisions of cuts and closures.
And, you know, Nissan, it seems was dragging its feet under the prior leadership under Oceeta. So that created some friction at the top end.
And then there was also some there was some issues of a technology, especially around hybrids. Honda wanted Nissan to adopt its hybrid powertrain strategy and technology while Nissan had invested billions in its e-power hybrid technology, which is a different kinds of series hybrid.
So, you know, one side didn't want to give up their baby. And so that led to, you know, for the friction.
And then I guess at the finally, I think the thing that broke the camel's back was this was originally sort of described as a merger of equals at least Nissan wanted to show the world that they were not just getting acquired, but towards the end, Honda pretty much said that said that. Listen, we're not interested in in any merger or in any kind of long term partnership. We need to just acquire you.
And that was, you know, a bridge too far for Nissan and the board basically said, no, that's not happening coming up. We'll talk more about Nissan's turbulent 2025, including its recent decision to overhaul its controversial dealer stair step incentive program. That's next on daily drive.
Now, Nissan just recently announced its overhauling its controversial stair step program after outcry from dealers. How has that saga unfolded throughout the year and can Nissan repair the damage.
Yeah, so stair steps have been a issue since Carlos gone. So Carlos wanted to basically essentially drive market share at all costs.
And so he he pushed volume on the dealers. They would basically be forced to take product and then it was up to the dealers to figure out how to sell it, which led to all this kind of discounting.
And you know, periodically every few years, you know, Nissan management says, okay, we understand the, you know, we made a mistake. We're going to move away from this volume. We're going to go towards the, you know, towards more of a profit oriented push, especially after COVID when they were able to charge higher rates.
So again, you know, a new leadership came last year, contact Christian, when they are in the US, they pushed a new plan called Nissan one where they basically said, okay, we're going to basically focus all the dealer compensation on growing market share because we desperately need to grow market share.
And they promised that the targets would be attainable. They would be, you know, enough to make the dealers profitable. And according to some dealers, none of that has happened.
And so then the dealers basically didn't engage in the program only about half the dealers were achieving their 100% of their volume.
So so now they've said, okay, let's try this again. So now they've gone back to the drawing board. They're working on a new plan for 2026 where they would reduce the number of volume targets that dealers are eligible to hit.
They're going to remove the top tier, which which led to, you know, significantly higher objectives, you know, their argument is, okay, now that now the goals will be a little more attainable.
So the dealers will engage. Of course, that's a big to be determined at this point.
Larry, what are your thoughts on Nissan in the year 2025 of all what went on?
So you can't help but sit here watching Nissan from the outside if, especially if you've done this for as long as I have.
And think, oh, my gosh, this is this is Detroit in 2008 and 2009, right.
The Honda, you know, semi merger pushed together is like Ford and GM, right. Here's two here are two companies that on paper, okay, you could combine, but they hate one another.
Their cultures are completely different. But let's, you know, because we have to push, we don't want us.
We don't want to lose one from team Japan, right. So we got to push them together.
And that just doesn't that culturally just doesn't work. The stair steps.
That's Stellantis, all or Stellantis, FCA before that, you know, Daimler, Chrysler and Chrysler.
Completely the same, right. They went through all this.
They did this. And what Nissan has been doing is just like in a sped up time frame, reliving that horrible period in Detroit before, you know, it kind of got its crap together for about a minute and a half and was able to turn things around.
But until you have that crisis that Nissan has right now, and you until you learn that, okay, your dealers are actually, you know, here to work with you until you learn that lesson.
They're going to be in rough shape.
But Larry, it feels like Nissan has beaten crisis for a while now, unlike you, I'm relatively new to the automotive industry and in the grand arc of things.
But with these struggles, the same with Detroit for as long as they, as Nissan seems to be.
Yeah, well, I think the cause is the same, right, which is that they, they're chasing market share. They're chasing, you know, quarterly returns.
They're not focusing on fundamentals. They have good products. You know, they have some really good products Nissan does.
They just need to stop pushing them and so many automakers do this, right. They, they're, they have, oh, I have this great product.
It needs to sell 200,000 units in the US or it's, or it's crap, and we're going to throw it away.
That's the number that I need to hit my bonus. So we're going to do everything we can to get to that level and that's it.
And if that costs some people some money, you know, from whether it's dealers or the factory workers, whatever, you know, we'll set that aside because I got to hit that quarterly number.
But I also think that Larry, in addition to all the things you've said, I think Nissan's property, Nissan's biggest problem is a perception problem.
The customer still thinks of Nissan as a discount brand.
Absolutely.
And a lot of the problem is the CVT issue that they had years ago, which apparently has been resolved.
The newer CVTs don't have all these issues, but, you know, every time I go on Reddit, I'll see these comments on any of the stories Nissan stories.
Well, you know, I never buy it because of the CVT. And I think that's, you know, Nissan has to figure that problem out more than a product problem.
They have, they've got, they've fixed the CVT issue. Now they have to convince the public that they fixed the CVT issue.
And to give them a second chance.
I want to ask you a question, Arvash.
I want to hear your conjecture on this.
I think Nissan made a fundamental mistake when they launched Infinity.
Because I think they, they tried to copy what Toyota had done.
They like this.
What, you know, what Honda tried with Acura.
And they just didn't, just didn't work as well.
And I think they, they blew a lot of money in that, and then trying to launch Infinity.
And then to do that, they started cutting elsewhere.
And that was really the kernel to me of their problems.
What do you think?
I agree. And then I've asked people, I've asked top executives, why is Infinity still around?
Well, especially now when you're struggling, you have so, so many priorities and much fewer resources.
Why don't you cut your losses and you focus on, you know, like, well, it doesn't make any sense.
Because Infinity may not sell in volume, but they're relatively speaking the amount that they bring in profit.
Far outweighs any other model that they have.
So like, for example, you know, they, like one QX 80, you know, would deliver enough profit.
I'm just making up a number that I'm not doing.
You know, would equal like a hundred centros that they sell in terms of profit.
And, and for them, their other argument is that they need Infinity in order to get that scale.
So all their Infinity cars are basically vehicles are basically based on Nissan.
Nissan platforms.
So Infinity gives them that additional incremental volume that on there, on their Nissan investment,
product investment, that will help lower the, you know, the lower the poor unit cost,
or increase the margin across the line up.
But absolutely, I mean, there is a cost to keep Infinity around.
I mean, the marketing of the brand and everything else.
But they see it as, you know, a major profit driver.
Oh, I'm sure those units are profitable.
But they just, they don't sell in the volume to make it worthwhile to me.
But hey, you know, I'm not, I'm not Christian Mune trying to run a Nissan right now.
Did you said that Infinity is kind of essentially funding Nissan, I guess.
Like, they're kind of the, they're bringing in the money.
They're bringing in the money.
I wouldn't say funding because the volumes are much smaller.
Right.
But is there a certain loyalty that consumers have?
Is there consumer loyalty to Infinity?
Like you would have with like a Lexus or like a BMW or actor?
No.
Yeah, I find that very hard to imagine.
I don't think Infinity has the cache of a, of a Lexus.
Or even an Acura or name recognition.
Now, again, back in the day, there was a, you know, when Infinity was a little egeo
in terms of their products with the FX and some of these other models.
It did have more of a niche appeal.
That's daily drive for today.
I'm Kellen Walker.
Thanks to automotive news executive producer Jake Nier for his help on today's podcast.
You can get the latest news on retail strategies, manufacturing,
and everything happening in the auto industry at autonews.com.
We're off tomorrow for the Christmas holiday.
Come back on Friday for a look at the year Toyota had in 2025.
Their big announcement this year is their Gorilla, which is RAV4.
It outsells what I think 11 other brands.
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About this episode
Nissan faced significant challenges in 2025, recording its worst annual loss in 25 years and struggling with a failed merger attempt with Honda. The episode features insights from automotive experts discussing Nissan's austerity measures, including job cuts and plant closures, as well as the controversial dealer incentive program. The conversation highlights the cultural and strategic misalignments that contributed to the merger's collapse and examines Nissan's efforts to revitalize its product lineup and market share in North America. The episode also touches on the perception issues surrounding the Nissan brand.
Daily Drive's year-end series continues with a deep dive into Nissan's challenging 2025. Automotive News Atlanta Bureau Chief Urvaksh Karkaria and Toyota reporter Larry P. Vellequette examine the long list of struggles that plagued the Japanese automaker this year, plus its recent decision to overhaul its controversial dealer stair-step incentive program.
