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Nissan's big price cuts threatening others' profits

Bloomberg reports Nissan may be keeping the competition up at night even more than normal. The Japanese automaker recently cut prices on seven of its models and bolstered incentive offerings in an attempt to gain market share in the US, and the strategy is working. Last month saw the company's sales leap by 25 percent, which is nearly triple the industry average. Nissan is currently taking advantage of the weak yen - Japanese currency has fallen by 15 percent against the dollar, which has given the automaker around $1,500 per car to use to either add features or cut prices. Some analysts are calling the policy "scorched earth."
Meanwhile, American automakers like Ford, General Motors and Chrysler are doing their best to keep from sliding back into old bad habits. The Detroit Three have steadily moved away from a discount and incentive strategy to bring in new buyers since the 2009 recession. Those short-sighted tactics helped paved the way for bankruptcy at both GM and Chrysler. As Bloomberg reports, the resolve to stay away from big discounts may falter if Toyota begins using similar tactics.

Renault splits into 5 businesses in drive to boost profit

  PARIS — French car maker Renault announced a major overhaul that will see it separate its activities in five businesses, deepen ties with China's Geely and spin off its electric vehicles unit through a stock market listing next year. At a long-awaited investor presentation on Tuesday, Renault said it targeted operating margins of 8% for 2025 and rising to more than 10% in 2030, from 5% expected this year. It also plans to reinstate dividends from 2023 after a three-year hiatus, and generate more than 2 billion euros of cash annually between 2023-25, growing to more than 3 billion euros in the following five years. An early mover in the electric car race, Renault has fallen behind newer, more agile rivals like Tesla. After needing emergency state cash during the COVID pandemic, the group is looking to extend on a turnaround following losses in 2019 and 2020, and increase the valuation of its different parts. But big question marks remain on its strained relationship with long-standing Japanese partner Nissan, as Renault looks for other outside investors for each of its divisions. The main plank of the car maker's strategy is separating its combustion engine business — which will partner with Geely in a 50-50 joint venture, also announced on Tuesday — from its electric vehicle unit, to be listed in the second half of next year. Nissan is expected to take a stake in the EV venture, codenamed "Ampere," alongside other investors, though Renault will keep a majority stake. Talks with Nissan have been dragging on, amid Japanese reservations about sharing technology with others, including a Chinese rival like Geely, sources have told Reuters. Shares in Renault fell 2% by 1254 GMT after earlier dipping more than 4% as it gave little detail on the state of play of the discussions with Nissan on the future of their partnership. Renault CEO Luca De Meo said the group wanted to give the alliance a strong future and a "new chance." But he also said that — as in a marriage — "it is important for us to have our own hobbies and our own life." The companies had initially set a Nov. 15 target to reach a deal, but no announcement is now expected on that date, according to people familiar with the talks. Aside from the Ampere EV unit and the combustion engine division, Renault will have an additional three businesses — the Alpine sports-car brand, financial services and new mobility and recycling activities.

2016 Nissan Leaf with 107-mile range will start at $35,050* [UPDATE]

Here we go. Without making any huge leap into a second-gen model, Nissan has upgraded the 2016 Nissan Leaf from the 2015 model with a big range increase and a more durable battery. According to the new EPA numbers, the new Leaf will go 107 miles from a 30-kWh battery pack. That's going to get people's attention, since the current Leaf has an 84-mile range from a 24-kWh pack. You will still be able to get an 84-mile Leaf in the 2016 model year, since Nissan is keeping the S trim level with the lower, 24-kWh pack size. If you opt for the more expensive SV or SL trims, then you'll not only get the 27-percent greater range, but also a battery pack that is slightly heavier (by 46 pounds) and has more modules (eight vs. four) but the same number of cells. The two packs are the same size. In the end, the EPA rates the 30-kWh with 124 city, 101 highway and 112 combined MPGe fuel economy, while the S trim keeps the 126 city, 101 highway and 114 combined MPGe of the 2015 models. All the new 2016 Leafs keep the same 80-kW AC synchronous motor from earlier models. It still offers 107 horsepower and 187 pound-feet of torque. Prices for the new Leaf start at $35,050 for the Leaf SV (up from $32,950 for the 2015), $37,640 for the Leaf SL (up from $35,970) and $28,060 for the Leaf S (no change from 2015). All prices include $850 delivery charge but not the potential federal tax incentive of $7,500. The 2016's exterior is virtually identical to the 2015, aside from some new colors with names like Forged Bronze, Coulis Red and Deep Blue Pearl. Nissan is offering a few upgrades on the inside, though. There's a new graphic interface display on the 7-inch color screen (5-inch on the S trim) and a new "beam forming microphone" that should make the car's voice recognition better. The information that is displayed on the screen has also changed, with the charging screen info being updated every 12 miles. Given that some (but not all) of the rumors of this Leaf range bump turned out to be true, what do you all think of the talk of a 250-mile Leaf in about three years? UPDATE: The original headline quoted the price of the SL model instead of the less expensive SV, and has now been changed to accurately reflect the starting price of the SV. Both SL and SV come standard with the new 30 kWh battery, while the S model comes standard with the smaller 24 kWh pack. Thanks to those who pointed out this discrepancy!