Nissan Motor Co, Japan's second-largest automaker, said it is selling fewer vehicles domestically than it had forecast as it phases out older models and prepares to introduce new vehicles later this year.
The decline is "worse than expected," said Toshiyuki Shiga, Nissan's chief operating officer, speaking to journalists in Tokyo. "We were surprised at how dealer traffic fell since last autumn, so we are trying to lure more customers to our dealers."
Shiga, No. 2 at Nissan after chief executive Carlos Ghosn, said he was still studying various options and could not say when his decision would be made. Ghosn also serves as chief executive of Renault SA of France, Nissan's alliance partner.
Nissan's sales in Japan last month totaled 34,679 vehicles, down 27 percent on-year. Including minivehicles, Nissans sales in Japan fell 18.5 percent.
The company's sales began to drop last October as the boost from six new or redesigned models such as the Tiida and Note compact cars released between September 2004 and January last year tapered off.
The carmaker will bring out four new models in Japan this year. New models boost sales for about a year in Japan, with one of the shortest product cycles in the world. Nissan's domestic sales fell 27 percent last month to 34,681 units.
"If a new model is released, demand surges, while when you don't have a new model, sales stall," Shiga said.
Consumers are also opting for smaller and cheaper minicars amid rising gasoline prices. Sales of minicars, or vehicles with engines smaller than 0.66 liter capacity, increased for the fourth consecutive month, rising 5.2 percent to 149,367 units last month, the Japan Mini Vehicles Association said.
Nissan may increase the number of minicar model to "reinforce" its minicar unit, Shiga said. The automaker plans to release four new or redesigned models in Japan this business year.
"Given the current demand, expanding our minicar business is an option, Shiga said in an interview in Tokyo. "Having minicars lures new customers to Nissan and helps us hold on to the ones we have."
The automaker expects its domestic vehicle sales to rise 0.5 percent to 846,000 units in the year ending in March and is maintaining that target, Shiga said.