"It's very difficult for the majority of dealers to hit current stair-step targets, with the money in the system, and be profitable," Smith said.

At the same time, some dealers say more customers are taking a pass on what the retailers say are dated products in Nissan showrooms.

With customer traffic declining, the fran-chise has taken a hit, said David Basha, owner of Carriage Nissan in Gainesville, Ga.

"You don't have as many customers. It's like somebody shut the faucet off," Basha said.

Nissan Division's U.S. sales slumped 8.7 percent to 1.22 million vehicles last year, in an overall market down just 1.2 percent. The company says the decline was partly a result of its strategic decision to cut back on its sales to rental fleet customers.

But according to Smith, 40 percent of Nissan's dealers are now losing money or just breaking even. And many are shifting their attention away from Nissan's new cars and instead focusing on marketing higher-margin certified pre-owned and used-car sales, he said.

Declining dealer commitment to new cars is a potential time bomb for the brand. If franchised retailers skirt the sales program, they aren't ordering as many new cars from the manufacturer — which means Nissan's factories will have reduced production volumes, fewer vehicles will flow into Nissan service bays over time and the pool of available used cars will be smaller in the years ahead.

Basha said he has ordered only a "handful" of cars from the factory in the past eight months.

"I'm going to go from stocking more than 400 new cars last January to stocking about 100," the dealer said. "So, Nissan's going to feel the pinch."

But abandoning new-car sales is not good for dealer balance sheets, Basha acknowledged.

"We derive our new-customer base from selling new cars, not used," he said. "We don't have the repeat customer coming in for warranty work."

Nissan North America executives were unavailable to discuss the situation. In response to questions from Automotive News, company spokesman Chris Keeffe said, "Our new vehicles will attract more new customers. Nissan is launching 10 new vehicles over 20 months to refresh the Nissan portfolio by 70 percent. We expect increased dealer foot traffic with new models such as the all-new 2020 Versa, refreshed 2020 Titan, and most recently, the all-new 2020 Sentra, which is arriving at dealer lots now."

Meanwhile, Nissan's U.S. market share has dropped 1.2 percentage points to 7.2 percent over the past two years and is the lowest share for the brand since 2012, according to the Automotive News Data Center.

It wasn't supposed to turn out like this.

Nissan's decision to tone down its aggressive sales incentive program came after years of dealer complaining, and after retailers finally found a sympathetic ear in the company's current management team. Critics argued that pushing retail sales with incentives triggered price wars among retailers in a market. And in the spirit of turning away from that divisive practice, the manufacturer offered dealer cash and other incentives that were not tied to meeting monthly and quarterly sales goals.

But Nissan has also cut back on performance-based payouts. As a result, the bonuses dealers can earn for hitting monthly sales goals have been reduced from as much as $1,900 per vehicle in 2017 to about $600 per vehicle today, according to Smith.

The effect is clear.