Market leaders quick to announce price cuts

Press, 31 March 1989, Page 30

Market leaders quick to announce price cuts

Toyota New Zealand and Mitsubishi Motors New Zealand were off the mark smartly last week after the Minister of Finance, Mr Caygill announced that he was halving excise on cars.

As befits market leaders intent on staying that way, both announced price reductions the following morning. In Toyota’s case it was important because the embargo on details of the new Cressida and Camry was lifted on Holy Thursday. Thus, I was able to amend the retail prices in time for the Toyota story, because the prices the press corps had been given the previous week naturally did not take into account the excise reduction.

Although it did not have such a cogent reason, Mitsubishi Motors maintained its high profile by announcing reductions, although I had not received a revised price list (and I have from Toyota) at the time of writing. Other car importers and assemblers were still toying with their pricing problems before Easter and, in fact, the only other communication that reached my desk was one from Nissan which announced that it has fitted new generation, multivalve “super intake” 1.4 and 1.6-litre engines to its Sentras, at present the smallest models in the Nissan range in this country.

The price of these new Sentras was stated to vary between $18,495 and $26,945. Although there was no indication of whether the company has heeded the Caygill message, I gather it has. At present there seems to be a preoccupation with the Nissan Way, but more about that later. It is said the new GA series of engines, which replace the E-series, deliver more power and pro-

BEHIND THE WHEEL Peter Greenslade

vide improved fuel economy. The latter, at least, is welcome news, as I can’t see a deregulated oil industry putting a damper on petrol prices out of the goodness of its heart. The Nissan Motor Company is producing two cars that are virtually replicas of concept cars displayed by the Japanese company at last year’s Tokyo Motor Show.

Nissan states that its Pao and S-Cargo "seem destined to create their own cult following.” That is all very well until we look a little harder at the word “cult.” The Oxford Dictionary describes cult as a religious worship especially as expressed in ceremonies; "study and pursuit or worship of (often of something elevated into factitious importance ...” If “factitious” is alien to the average individual’s vocabulary, according to the dictionary it means “artificial, got up.” To my mind, all that suggests is that Nissan is getting excited about something that really does not matter very much. The Pao, according to Nissan, has “the great outdoor feel about it,” and the car has been designed that way to evoke a holiday feeling and a spirit of adventure.

Its stablemate, the SCargo, Nissan believes, breaks all conventions for commercial vehicles, and while it is a workhorse, it is also a “vehicle with a unique and fashionable design that is aimed at becoming a popular hit by capturing the imagination of people.” A study of the Pao and the S-Cargo should give readers an idea of what Nissan means and it is my guess that it is nothing more than what the average Kiwi beholder of the photographs will decide — a load of old rubbish.

Incidentally, Nissan does not propose to export either car.

Thus, it is heartening to learn that at least one Japanese car-maker is becoming aware that national and international tastes are not always in harmony. The pictures show the Pao (top) and S-Cargo (bottom).

Perhaps more pertinent to the New Zealand situation is the news from Nissan New Zealand that 50 new jobs, a 53 per cent increase in productivity and locally assembled cars which match the quality of Japanese-built vehicles, are direct results of the Nissan Way work agreement signed nearly a year ago.

The agreement, which originally covered only Engineers’ Union members in Nissan’s Manukau City plant, now encompasses members of the carpenters’ and electricians' unions and has recently been renewed for 12 months with a 4.5 per cent wage increase. The 53 per cent production increase has been assisted by a 46 per cent reduction in average absenteeism and lower labour turnover rates than in 1987. This accounts for Nissan’s increased sales volume, which largely has been generated by im-

proved production quality. Moreover, in spite of the higher wages paid last year as part of the Nissan Way agreement, manufacturing costs per unit did not increase because of increased productivity.

Nissan was also able to hold its new car prices through 1988, in spite of the unfavourable exchange rate with the Japanese yen about midyear.

Nissan also introduced a full 60,000 km warranty on all its locally assembled cars and is still the one and only local assembler to do so. These facts on the fallout from the Nissan Way agreement added up to Nissan gaining 13.4 per cent of the new-vehicle market in January this year. That places Nissan third on the best-sellers’ ladder behind Toyota and Mitsubishi.

Although the top two have given no indication that they propose to go other than their own ways, could it be that Nissan is starting to make its own way up the Japanese family tree?

At least it seems that even though it makes funny cars, Nissan has also developed a cult that is making it potentially very viable in this country.

Now that he has not got Roger Douglas heading the class, maybe David Lange should take a leaf out of Nissan’s book.

After all, it was not so long ago that the Japanese left the West with little more than the cover.

Since then, New Zealand, at least, has been laboriously conducting an inquest and asking itself “Where did we go wrong?” Maybe Nissan has the answer, but it could take years for the cent to drop and by then the bankers as well as the wageearners will have lost their copper bottoms.