Mike Colleran has seen plenty of changes in his decades inside the auto industry. And there’s plenty more coming from Nissan, the Japanese automaker this week unveiled its Nissan Ambition 2030 plan which will see it radically ramp up spending on “electrified” vehicles. The goal is to have 23 of them in production by 2030, including 15 all-electric models.
That includes the new Ariya SUV that Colleran, a Marine Corps veteran, helped unveil at the LA Auto Show last month. Nissan was an early EV pioneer with the Leaf, the first mainstream battery-electric vehicle launched a decade ago. But it has lost momentum to Tesla and other brands now starting to flood the market with their own, long-range BEVs.
Helping kick start Nissan’s push into the emerging market with Ariya will be one of the key challenges for Colleran, the senior vice president overseeing the automaker’s U.S. sales and marketing.
In a far-reaching conversation, Colleran talked with TheDetroitBureau.com about the launch of Ariya, Nissan’s EV ambitions and the ongoing problems the industry is having with electric vehicle quality. He also looked at the impact of COVID and parts shortages on inventories and incentives — as well as the rapid shift from in-person to online vehicle sales.
Impact of electric vehicles
TheDetroitBureau: Let’s open up with the new Ariya. Nissan introduced the Leaf (in 2011) and promised to be aggressive with new models. But, a decade out, you’re only just coming out with your second battery-electric vehicle. Why did you wait so long? Some analysts believe that if you’d not waited you might have short-circuited the rise of Tesla.
Mike Colleran: Leaf was a great start into mass market EVs. There are 550,000 out there and they’ve driven 5 billion kilometers (ED: more than 3 million miles). At the end of the day, the real question is the technology and was it ready for widespread EV adoption. I think we can honestly say no. I think the timing is right now. Our belief is that consumers are now ready to adopt. We’re getting more questions about EVs … about range, capacity, safety, refinement, serviceability. So, I think the timing is right (for Ariya).
TDB: I could argue with you on some of that. I think Nissan lost momentum, lost its fanboy base that’s now with Tesla. So, won’t it be more difficult to pick up where you were during the first few years after you launched the original Leaf?
Colleran: I think there’s always a challenge getting consumers to realize you’re in the market and getting them to come look at you. From our standpoint, we’ve got a couple things going in our favor. And with Leaf, at least we have some credibility and fans. You saw that with the turnout of consumers the night we unveiled the Leaf (the day before the LA Auto Show). Overnight demand was strong on the advance reservation program.
One of our secret weapons is the reliability of Leaf. We’ve learned a lot about what to do and not do. And our secret weapon is the 1,100 dealers we have covering 90% of the country’s geography. So, as we begin Ariya’s full launch, I think there’s an opportunity for us to win back customers, especially in light of the struggle some competitors have had with quality and service. It won’t be easy but we’ve got the right formula.
Quality and sales: a tough task
TDB: Speaking of quality and reliability, Consumer Reports recently released its annual Auto Reliability Study and battery-electric vehicles scored poorly. Jake Fisher, their head of vehicle testing, said the problem was that most new BEVs are loaded up with the sort of technology — like voice control navigation — that has proven highly unreliable. Simpler EVs, like the Kia Niro, however, actually scored quite well. So, how do you avoid running into this tech problem.
Colleran: Well, you have to build a great vehicle. Studies show EV buyers are more discerning. So, is it a reliability issue or do (EV buyers) have higher expectations. Either way, it’s incumbent upon the industry — and Nissan — to provide a better customer experience.
TDB: Is there more to that than just building better-quality vehicles?
Colleran: There’s e-commerce. EV buyers are asking for online purchasing ability and most can’t do that. Until Ariya we did not have a full suite of online services. Now, you can go all the way through the (purchase) process and have the car delivered to you. And, I think, that’s a key way to get EV buyers.
TDB: Do you have an estimate of how many buyers are doing at least some of the shopping experience online?
Colleran: Some level? I think it’s near 100 percent. One thing we know is the number is increasing as more dealers adopt (the concept). Right now, things are a bit distorted because of the chip shortage but, as we return to a more normal playing field, I think we’ll see the adoption rates rise. And with EV buyers, I think you’ll see some fairly high percentages of buyers that go all the way through to point where the car is dropped off in their driveway.
Impact of the COVID pandemic: online sales
TDB: We’ve certainly seen that happen in other retail areas during the pandemic.
Colleran: Some of this is due to COVID. I will tell you that we bought everything through Amazon or online. As the pandemic (wanes), I think we’ll see more customers get out for a test drive, but I think online purchasing will just get stronger and stronger in the automobile business. You can choose your financing from home. You can choose your accessories. You can get what you want, even if there’s not a vehicle on your dealer’s lot. And you can have the vehicle delivered to your home. When you offer that kind of access and availability, people are going to use it.
TDB: Getting back to EVs, a lot of stories say consumers don’t really know much about them and, unless dealers take the time to educate potential customers, those buyers tend to steer clear.
Colleran: That’s a great question because there’s not a lot of understanding about EVs out there. They’re still a bit of a mystery. But, every day, they’re becoming a bit better known. And manufacturers have to get out there and start talking more about EVs to the general consumer. We did that in an ad with Brie Larson (who) drives off in an Ariya. The media have to help. The government will help with the new infrastructure bill that we fully support.
Dealers are going to have to do a really great job of educating the customer. A 30-minute (new vehicle) delivery is going to be a thing of the past. We’re going to have to take them through all the technology so they understand how things like our (semi-autonomous) ProPilot works. That will get the customer to love the product — and that’s what loyalty is all about.
Recovering from the shortages
TDB: Before we wrap up, let’s talk about the semiconductor shortage. Some industry executives say chip supplies are improving. But they also worry that we could see other shortages crop up.
Colleran: Yeah, polyurethane and rubber and even bedliner material. A lot of things. But we’re starting to see production get a little better. September was kind of our low point. October and November were a little better. December will be a little better still. I wouldn’t say we’re getting back to normal because we’ll see the impact through fiscal year 2022. But will it improve every day? Yeah, we’re already seeing that happen. We’re prioritizing certain products, like Sentra, Rogue and Pathfinder — and now, Ariya, in order to get it to market.
TDB: Will dealer inventories ever get back to what used to be considered normal?
Colleran: I don’t have a crystal ball but 60 days? I think you’ll see it more like 45-50 days’ supply.
TDB: And what about sales incentives? With empty lots, automakers aren’t offering the big deals of the past.
Colleran: You know, I think the market will end up determining that.
TDB: You said Nissan supports the infrastructure bill. But Nissan seems less supportive of a proposal before Congress that would extend current EV incentives, adding up to $5,000 for vehicles built in the U.S. with union labor.
Colleran: The infrastructure bill will spur EV adoption. And we’re excited about tax credits as a way to help consumers get into a new EV. What Nissan can’t support is the union-only part. It can prevent consumer choice. And we have 14,000 men and women that work at (Nissan’s U.S. plants) and they shouldn’t be marginalized because of where they choose to work. That’s not the right thing.