Ban the Bland

When Nissan Motor Co. Ltd. peeled the wraps off its now-famous Nissan Revival Plan in October 1999, the ailing automaker promised that its turnaround not only would rely heavily on cost cutting, but also would draw strength from a reinvigorated product lineup.

In May, Nissan touted stronger-than-expected financial results for the previous fiscal year, with a compelling return to profit. This fall, the automaker unleashes a raft of new-for-'02 vehicles, just the first phase of a plan that includes 20 new products in the next two years.

The automaker spent the early part of the year on the auto-show circuit, teasing the public with glimpses of its new brand image. Nissan, officials say, no longer is content to chase after import market-leaders Toyota Motor Corp. and Honda Motor Co. Ltd. but rather plans to carve out its own identity. Operating under that theory, the automaker is placing its emphasis squarely on performance and styling.

A key piece of its brand strategy puzzle will fall into place this month, when Nissan unveils the production version of its 350Z at the Tokyo Motor Show.

The new Z car, a continuation of Nissan's legendary performance-oriented Z series, is meant to be emblematic of the automaker's new direction, picking up where the Xterra left off in the task of invigorating a brand that for much of the last decade carried a negative connotation.

The Z, due out in North America next summer, will be just that — an image builder, and just one of 10 new products set to debut in North America in the next three years. Like the Z, which promises to be a shining illustration of sharp design and performance, the bulk of the new products will further define Nissan from its competitors.

The automaker's product strategy is rife with potentially risky components. For one, while it's never good to chase competitors as Nissan has in the past, it also is difficult to go against the grain, especially when the strategy set forth by Toyota and Honda has made them the import-market leaders.

But being different is what the new Nissan is all about, something the automaker says none-too-subtly in an Internet ad campaign for its '02 Altima. The streaming video shows the new midsize sedan running over both a tub of vanilla ice cream and loaf of white bread at top speeds.

The new Altima indeed is anything but bland. Completely restyled and re-engineered, it is the most significant new entry out of Nissan this year. For the first time, the traditional 4-cyl. Altima now comes with the option of a 240-hp DOHC 3.5L V-6, part of Nissan's lauded VQ engine series. The clean-sheet design also is sure to boost the Altima image, which has suffered through previous incarnations.

The Altima bows at the same time as the latest Camry, which draws attention to Nissan's new direction even more profoundly. The Camry, whose V-6 tops out at 192 hp, appeals to what Toyota officials like to call “the big middle,” while Altima has no desire to be everything to everybody.

Nextrend analyst Chris Cedergren says the Altima has the ability to transform what he calls a segment of appliances into something far more dynamic. “When it hits, I think it will help sales a lot, because it's a tremendous car,” he says.

Analyst Jim Sanfilippo, executive vice president and regional manager of AMCI Detroit, acknowledges that the Camry is the segment's 800-lb. gorilla. Still, Mr. Sanfilippo says, the Altima ought to do “surprisingly well” thanks in no small part to its heightened horsepower. “The only thing people are willing to pay a premium for in the car business is performance,” he says. “It's an absolute measure of a vehicle's acumen. It's a way to keep score.”

The strategy of making performance an across-the-board priority is not as risky as it is smart, Mr. Cedergren says, because the new generation of consumer — from the younger Boomers down to Gen Y — seeks intangibles such as image and power.

The Altima is not the only car to get a power boost. The SE-R version of the Sentra also makes a comeback for '02. Originally produced in '91, the SE-R was dropped in '94, leaving a small but loyal following begging for more. The SE-R, which comes in two models, offers a sport-tuned version of Nissan's compact car, including a stepped-up, 180-hp 2.5L 4-cyl. engine (shared with the base Altima), tighter suspension and hot-rod features. The SE-R Spec V takes the pocket-rocket one step further, with 10 additional horsepower and a 6-speed manual transmission.

In the truck category, Nissan addresses consumer complaints by adding power to its Xterra sport/utility vehicle (SUV) by way of an optional supercharger.

Even the already performance-minded Maxima takes power one step further with a 3.5L DOHC V-6, which at 255 hp produces 33 hp more than the already stout 3L V-6 it replaces. For the true performance enthusiast, the '02 Maxima comes with the option of a 6-speed manual transmission.

The Maxima, however, may prove to be the fly in Nissan's ointment. The new Altima has received such significant boosts in power and size that it now is distressingly similar to the Maxima. Both vehicles are identical in length, and wheelbases differ by just 2 ins. (5 cm). This is in preparation of the two sharing the Altima's platform when the next-generation Maxima debuts.

Nissan acknowledges that the Altima is bound to cannibalize Maxima sales, but doesn't think the two will be redundant in the marketplace. Others disagree. “Both are the same size and lean toward the same positioning,” Mr. Cedergren says. “And both are very sporty.”

Whether both vehicles can prosper depends on what is done with the next-generation Maxima, where speculation ranges from an extended length to a V-8 powerplant, a continuously variable transmission, or rear-wheel drive.

This initial emphasis on power foreshadows what's to come. After the tough-act-to-follow Z, due to wow expectant fans as an '03, Nissan will introduce its first fullsize pickup and fullsize SUV, plus a new minivan to replace the Quest. The new trucks will be built at a greenfield production facility in Canton, MS.

The fullsize pickup will be larger and boast more horsepower than the Toyota Tundra, says Larry Dominique, Nissan chief product specialist, trucks and SUVs. Mr. Dominique acknowledges that the automaker is coming late to the game in the fullsize truck market but says Nissan is working on ways to differentiate its future offerings from the competition.

One method under consideration, he says, is through a stronger emphasis on power and performance. The pickup, he says, also will emphasize technology driven features, although it won't be as “out there” as the concept truck first shown at the North American International Auto Show this year. Not only are Nissan's fullsize trucks long overdue, they bow at a time seen by many as past the truck's heyday, as economy minded consumers find more use in crossover vehicles.

These factors don't deter analysts from wholeheartedly endorsing Nissan's truck plan.

“It's a tough segment, but I think they will generate volume,” Mr. Cedergren says. In fact, he thinks the trucks will be so strong that they will have the power to turn around the entire segment, similar to the situation with the Honda Odyssey minivan. “It came to the minivan segment when it (the segment) really was in bad shape,” he says. “Product can invigorate a segment.”

“It's not a reach to say they'll have very competent vehicles two years out with a volume to match,” says Mr. Sanfilippo, adding that the Nissan fullsize trucks have the capability to impact the margins of the Big Three.

Plus, insiders say the new minivan will best anything on the market, even outdoing the Odyssey. And despite the precarious economy, analysts say it's not a bad time to be investing in domestic manufacturing, especially because Nissan's Smyrna, TN, plant has been a bastion of efficiency and flexibility. Domestic production also will help isolate the automaker from currency fluctuations.

The full-on drive into the truck segment leaves Nissan looking to fill the remaining holes in its lineup. Officials say Nissan is considering a smaller, car-based SUV. The automaker considered but ruled out the X-Trail, which sells in Europe and Japan, as being too similar to the Xterra. It now is considering which car platforms would lend themselves to serving as a base for a future crossover vehicle. One possibility is a crossover based on parent company Renault's Megane Scenic multipurpose vehicle, which has met with resounding global success. Another option may be sharing platforms with an Infiniti crossover, based on the FX45 concept shown at this year's Detroit auto show.

With an unprecedented emphasis on horsepower, two similar midsize sedans, a past-due push into the light truck segment, investment in manufacturing in a down economy, Nissan's North American playbook most certainly can be characterized as risky.

It also indisputably is bold, and such measures may be the only way for the automaker to enjoy a sustained revival. This confident series of moves lead analysts to believe that Nissan's future is among the brightest.

“They're smart,” Mr. Sanfilippo says. “Maybe other automakers ought to look at them and take some notes. What they have done is nothing short of incredible.”