Nissan’s market share in Japan continues to slip even as the Renault management team strives to rebuild the company’s fortunes. Nissan, once Japan’s leading car maker, saw its share of domestic sales drop further to a first-half low this year of 19.4 per cent.
As part of the Renault-inspired restructuring, this September, Nissan’s four dealer chains in Japan are to merge into one and will be relaunched through an advertising campaign by agency Dentsu.
The choice of Dentsu surprised many. The agency used to handle about a third of Nissan’s advertising but was sacked in 1992 when Nissan announced it would consolidate virtually all its budget with Hakuhodo and anointed it as “strategic and creative partner”.
While some Hakuhodo executives play down Dentsu’s new role as a project “without any strategic significance”, the agency is more positive. “It is important to us that Nissan will no longer adhere to its previous policy of concentrating its marketing partners in one agency,” comments one cautious executive.
The Dentsu business could be worth as much as &£100m over the next three years on top of Nissan’s annual media spend of about &£275m.
The appointment is also a blow to TBWA and Publicis. When TBWA bought Nissan’s agency subsidiary Nippo Advertising last year, the sale agreement obliged the car company to spend 25 per cent of its budget through the agency for four years.
Nippo has traditionally carried out below the line and promotional activity. A high profile advertising campaign would have fitted well with TBWA’s plans to position the agency as a creative hotshop. According to one of Nissan’s advertising managers, TBWA Nippo does not fulfil a strategic role in its advertising plans but simply places media to fulfill a contractual obligation.
Publicis, meanwhile, which opened a small agency in Tokyo last year, has been seeking ways to build enough critical mass to take substantial accounts from its three major aligned clients in Japan; Nestlé, L’Oréal, and Renault.
Publicis’ overtures to form a joint venture with Hakuhodo were rebuffed earlier this year. Joint venture talks with Tokyu Agency, Japan’s number four shop, have stalled over arguments about equity shares and management control. A quest for acquisitions in Japan has so far failed to unearth a candidate strong enough to meet Publicis’ needs. The Dentsu appointment puts a Renault-led assignment from Nissan further out of reach.
Like Hakuhodo, Dentsu handles a large portfolio of car accounts, suggesting that even when times are as tough as they are for Nissan, account conflict is still not viewed as a major problem among Japanese advertisers. Last year, the top three spenders were Toyota, Honda, and Nissan – all of whom now use both Dentsu and Hakuhodo.
While Dentsu executives welcome the agency’s reappointment, they are cautious about where it may lead. “I’m not sure that Yutaka Narita [Dentsu’s president] will add a Nissan to his company cars just yet,” says one insider.
Narita can currently be seen chauffeured around Tokyo in either a Toyota or a Mercedes.