Weak demand threatens to hasten Nissan's decline

Carmaker's profits slumping amid lack of popular hybrid models, inventory backlogs

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TOKYO - Waiting times for Nissan Motor cars in Japan have shrunk far below those of other local brands, the latest sign of weak customer demand threatening to worsen the carmaker's slumping profits.

While the country's other major carmakers take half a year or longer to ship a new vehicle in Japan, many of Nissan's most popular models can be delivered within a month or two.

Similar dynamics are also playing out in the US, where inventory levels are typically higher: Nissan had an average of 109 days' supply in October, well above the industry average of 85 days and Toyota Motor's 35 days, according to market researcher Cox Automotive.

Part of that is a lack of popular hybrids, another reflection of the challenges facing Nissan, where an outdated product line-up and inventory backlogs are fuelling a cycle that threatens to hasten the carmaker's decline.

Elevated spending on sales incentives is cutting into profit, which is shrinking, forcing Nissan to shed 9,000 jobs and cut a fifth of capacity.

"It's a deteriorating brand," said analyst James Hong at Macquarie Securities Korea. "Having no hybrids is one thing, but the company's response to a changing situation was very, very slow."

Driving a new car off the lot is not a concept that exists in Japan. Regulations and paperwork, along with less space for inventory, mean it can take weeks or months to get your hands on a new set of wheels.

But Nissan's Leaf, Sakura, Note and the Serena - its best-selling family van - can be handed over relatively quickly, according to delivery data and checks at dealerships.