In a world where green technology is becoming the norm, many companies are looking for innovative solutions that align with this trend. Carlos Ghosn, CEO of Nissan Motors and Renault, made a bold move by introducing the first ever mass-produced emission-free car, the Nissan Leaf. I believe that this all-electric vehicle has great potential worldwide, particularly in the growing BRIC markets, where there is a growing concern over fuel prices.
Why launch the Leaf?
The Leaf responds to the growing concerns over fuel consumption paired with fuel prices, and to the current economic crisis. Thus, consumers will be looking for more economical alternatives for personal transportation. There is also a growing segment of the market that is concerned with carbon emissions and environmental impact; the Leaf perfectly fits the bill. Nissan might also be seeking a halo effect: to sell more gasoline cars. The all-electric car is clearly an innovation that attracts car shoppers to the showroom and introduces new customers to the brand. The launch of the Leaf is also fueled by the prospects of first mover advantage in sustainable transportation, despite the risks entailed. Nissan have invested so much in the success of the Leaf that if it fails, the Japanese giant might go down with it.
How is it performing?
Nissan Leaf sales have been outselling its main competitor, the Chevrolet Volt. To minimize inventory, the Leaf is only available as a pre-order. Since its launch in December 2010, Nissan delivered over 15,000 Leaf cars in 2011 and struggled to meet the 5,000 remaining orders. Nissan has stopped taking orders for the Leaf as they have already reached their target of 20,000, three months in advance. As a product in its early adoption phase, the Leaf is performing at an exceptional level. However, Nissan has to be able to support fast growth and meet the growing demand for the EV or it risks losing hype and momentum.
Reasons behind performance
The success of the Leaf is mainly attributed to its original concept and expensive marketing campaigns. The leaf is a product that defined a new category and therefore, needed to go through massive customer education campaigns. Most importantly, Nissan was able to deliver a quality product after so much hype, building confidence with early adopters. It responds to a growing trend and solves the problem of high fuel costs and gas emission concerns. The Leaf gives a sense of gratitude to those who want to have a positive impact on the environment. With its launch, Nissan organised a tour of the Leaf around the United States giving people a chance to test drive and get acquainted with the new product. This built brand awareness and attracted both the media and industry analysts.
“Will the Leaf be able to win the hearts of the mass market and revolutionize the car industry? What would be the challenges that Nissan would have to face?”