NASHVILLE – Nissan North America Inc. has spent most of 2006 in what the Chinese would call “interesting times.”

First, there was the controversial decision by Nissan CEO Carlos Ghosn to move the North American headquarters from Los Angeles to Nashville – to the consternation of much of its staff. Critics say the strategy was aimed more at cutting costs than fostering a warmer Midwestern image.

Then there was the media circus following Ghosn’s interest in adding General Motors Corp. to the Nissan-Renault Alliance.

Meanwhile, Nissan has taken such a beating in sales this year it looks like it deserves to be lumped in with Detroit’s struggling auto makers rather than with the rising vanguard of Asian vehicle producers in the U.S.

But unlike Detroit, Nissan is expecting sales to turn around in 2007.

Even so, a product lineup heavy in trucks and light on new passenger-car models hurt Nissan badly this year in North America. October was the first month since February the company had a year-on-year sales increase.

Despite October, Nissan’s U.S. sales were down 6.3% to 851,644 units vs. like-2005. The Nissan brand was off 5.2% from prior-year; sales for its Infiniti luxury brand were down 13.7%.

In 2007, Nissan is looking for the redesigned versions of its best-selling cars, the compact Sentra and midsize Altima, and Infiniti G35, to pull it out of its nearly yearlong slump.

“As we look at next year, we will have a full year of those products, and we expect to be up year-over-year,” Brad Bradshaw, senior vice president-sales and marketing, tells Ward’s here in discussing fiscal 2007 expectations (Nissan bases its projections on an April-March fiscal year).

Things are looking up as Nissan’s new Versa subcompact, a version of its global Tiida B-car, has added 14,573 units this year and is in short supply on dealer lots. Anticipation also builds for both the Nissan Altima and Infiniti G35, now available, which Bradshaw calls the “franchise cars” of their respective brands.

As Nissan settles in to its temporary digs here in downtown (a permanent suburban headquarters building in nearby Cool Springs will not be ready until summer 2008), Bradshaw insist the cross-country move went smoothly and already has been forgotten.

“You almost have to bring that subject up now, because it doesn’t come up naturally,” Bradshaw says.

Nissan says it was able to retain 42% of its Los Angeles-based staff, including clerical employees. Top-level retention was greater, with 80% of senior executives making the move, although the auto maker lost two top execs, Jed Connelly, whom Bradshaw replaced, and Jack Collins, NNA’s senior vice president-product planning.

Some disgruntled former workers say otherwise, and those who didn’t make the move have suggested via Internet postings that Nissan has exaggerated the retention rate, and that the percentage was calculated not based on the headcount in L.A. but the number of positions it would transfer to Nashville.

“I don’t think there was any intent by anybody to change the numbers,” Bradshaw responds. “The numbers were the numbers. Our goal was to try and get as many of the employees to come with us as we could, because we knew it was going to be a tough transition when you’re replacing what ended up being about 60% of the employees.”

Dominique Thormann, senior vice president-administration and finance, says some former Los Angeles-based employees have moved to other locations, notably Dallas, home of Nissan Motor Acceptance Corp., and Farmington Hills, MI, where Nissan has a technical center, making it hard to do an apples-to-apples comparison.

In Nashville, the auto maker received 70,000 resumes for just 700 positions, and both Bradshaw and Thormann say the new hires are fitting in nicely, having recently gone through corporate training.

“We held about a month ago our first-ever all employee meeting, which included the folks from the (Smyrna, TN,) plant as well as folks from the headquarters,” says Bradshaw. “It was very well received. We talked about culture and a lot of the things we need to do to assimilate the new people into the culture.”

As for the proposed Renault/Nissan/GM alliance, which petered out in early October, Bradshaw says NNA mercifully was left out of the study team, thanks to a directive from Nissan CEO Carlos Ghosn.

Ghosn told NNA to remain “focused on your objectives,” Bradshaw says. “Which is fairly consistent with what he says to us.”

Those objectives include launching the Altima and G35 and preparing for next year’s rollout of an all-new cross/utility vehicle, the Rogue.

Nissan has been notably absent from the small CUV segment in the U.S., while Japanese competitors Toyota Motor Corp. and Honda Motor Co. Ltd. are racking up record sales of their small CUVs in the U.S. this year.

The segment is growing rapidly, with Ward’s AutoForecasts projecting North American small CUV production to grow from 412,918 units this year to 784,628 in 2010.

“(The Honda) CR-V, (Toyota) RAV-4 (are) all worthy competitors,” Bradshaw says. “And we want to get in there and take a chance to fight it out with them because we think we have a really strong product, and it’s going to be well received in the marketplace.”

Nissan is mum on the platform underpinning the Rogue.

Bradshaw says the timing couldn’t be better for the vehicle, given the recent market shift away from midsize and fullsize SUVs. He says the buzz generated by the new CR-V, sales of which skyrocketed in October, should help the Rogue, too.

Bradshaw expects CUVs will not be the only vehicle segment gaining traction in the U.S. “There seems to be a rebirth of sedans,” he adds.

Due next year from Nissan is the SE-R performance variant of its revamped Sentra; a hybrid-electric version of the Altima, to be sold in just eight U.S. states with strict emissions regulations; and the coupe version of the Infiniti G35.

Although Infiniti Vice President and General Manager Mark Igo is mum on a replacement for the marque’s flagship sedan, the discontinued Q45, Ward’s data shows a new Q is due as an ’08 model next year, as is a next-generation Nissan Murano midsize CUV.

Murano sales have been a positive for Nissan this year. Through October, the marque was up 14.1% to 68,930 units from year-ago.

Bradshaw says the next-generation Murano will not change drastically in size or shape.

“I don’t see the actual dimensions of (the Murano) changing in great part, because I don’t think the market itself will change dramatically,” he says.

With the coming Altima Hybrid, due early next year, Nissan will take its first step into the hybrid-electric vehicle arena.

The auto maker says the car won’t be incongruous to its performance-oriented model lineup, with 158 hp and fuel-economy ratings of 41/36 mpg city/highway (5.7-6.5 L/100 km).

But Thormann says Nissan must leave no stone unturned when it comes to alternative powertrains.

“Today, there is not a single technology that is established as being the technology that will be adapted globally, internationally, or in the U.S.,” he says. “Hybrids are a miniscule part of the market; diesels the same thing.

“The day you get low-sulfur fuel available everywhere (diesel engine acceptance will grow.) Diesel engines have an incredible response to fuel economy. You don’t even need to change the size of the car.”

Thormann hints Nissan may draw on Renault for its expertise in adapting diesel technology to passenger cars in the U.S.

“The beauty of the alliance is being able to tap into each others’ strengths,” he says when asked if small diesels are planned for the U.S. Nissan already borrows Renault’s diesels for certain European models.

Infiniti’s Igo says a small, more fuel-efficient version of Nissan’s storied VQ V-6 might make its way to the U.S. in the future. In Japan, Nissan sells its Skyline model (Infiniti G35 in the U.S.), with a 2.5L VQ V-6.

Meanwhile, sales of Nissan’s Titan fullsize pickup fell 16.2% through October and again will miss the 100,000-unit annual sales target Nissan originally set for the truck.

But Bradshaw expects Titan sales to get a boost when Toyota’s new ’07 Tundra launches in February.

“Frankly, I think the launch of the Tundra will help us,” he says. “We’re a natural cross-shop for someone who is going to look at a Japanese pickup truck. And it’s been tough pioneering – I’ve got to tell you – all by ourselves out there trying to get credibility for a Japanese fullsize truck.”

Bradshaw admits the lack of dealers in certain pickup-friendly markets has hurt Titan sales. He says Nissan is trying to better match its dealer footprint with the company’s sales.

“How we would do that, what the tactics are, we really haven’t gotten to that station,” Bradshaw says.

Nissan currently has about 1,200 dealers, a number that is expected to remain stable.

The Infiniti brand added two new stores this year, bringing its U.S. dealer count to 180, Igo says, adding Infiniti still wants to increase its sales-per-outlet to 1,000, from about 750 units currently.

But Igo expects product will drive the increase, not remodeled showrooms.

Two or three dealers have remodeled their stores under Infiniti’s Retail Environment Design Initiative, with 20-25 additional renovations currently under way, he says.

Infiniti’s biggest challenge on the dealer front is the growth in units-in-operation (UIO), he says.

“The challenge for us is capacity. Our UIO has expanded dramatically. I think it’s going to grow another 44% over the next four years, and they’re going to need (service) space. So it’s a question of how do they do that,” Igo says. “We think we’ve got a blueprint they can follow that will work for them.”

Hopefully also included in that blueprint is a plan for a “less interesting” 2007.

cschweinsberg@wardsauto.com