Nissan Cube Won’t Target Scion xB, Exec Says

DETROIT – Although they both are boxes on wheels, the upcoming Nissan Cube will not cannibalize Scion xB sales, a Nissan North America Inc. official tells Ward’s.

Expected in the U.S. as early as 2009, the Cube will attract a more “gender-neutral” buyer than the xB, which has just been redesigned for ’08, says Larry Dominique, vice president-product planning.

“What we’re trying to do is identify the target customers we want to go after (with the Cube),” says Dominique, speaking to Ward’s after an SAE Foundation dinner here where he helped present Nissan Motor Co. Ltd. CEO Carlos Ghosn with an award.

“We think it’s different than what Scion is going after. We think we can get a bit more gender neutral, maybe a little bit more female (buyer) than what they’re getting. Certainly xB today is a little young, macho dude car,” he says.

While the Cube might attract some buyers of the original, smaller xB, the new Scion xD hatchback could pose a challenge to the Cube, he says.

“(The) xD is a little bit smaller than a lot of our B-platform vehicles,” Dominique says.

Dominique declines to comment on reports out of Japan earlier this week that indicated Nissan had more small cars planned for the U.S. beyond the Cube.

“When you start looking at our portfolio: Cube, Versa hatch, Versa sedan, then our C-class platform Sentra, that’s quite a few products,” he says of Nissan’s small-car U.S. offerings.

Cube won’t cannibalize xB sales, says Nissan.

While sales of many of its larger models have been slumping as of late, the B-segment Versa has been a success for Nissan, with sales of 21,208 units through April in the U.S., according to Ward’s data, which places it just behind the Lower Small segment-leading Toyota Yaris.

Nissan continues to offer three transmission choices for the Versa: a 6-speed manual, a continuously variable transmission, and a 4-speed automatic. The latter transmission was to be offered for only a short period after the Versa’s launch last summer, but Dominique says it has proven popular, with a take rate that is just below the CVT.

“(Manual transmission take rates are) pretty low, I don’t know the exact number, but it’s the low 20% (range),” he says. “And beyond that I think the (CVT) mix is a little higher than 4AT.”

Nissan had some supply problems with both the 4-speed and CVT transmissions when Versa launched. “The mix was not really vetted out very well,” Dominique admits.

“Right now, we’re looking at the dealer orders. We’re starting to get a better feel for what’s coming out. And from my perspective, whether we keep CVT or 4-speed AT, we want to make sure the lineup between Versa and Sentra sedan is well positioned. So that’s going to drive our ultimate decisions on what we do on the transmissions.”

Asked if he believes the Versa has cannibalized sales of the new Sentra, which has been down vs. year-ago all but two months since its October 2006 launch, he says “not too much.”

“When you look at the transaction price Sentra is getting, and the kind of customer we’re attracting to it, it’s pretty close to target,” Dominique says.

Instead, he believes that moving Sentra up in price, to make room for Versa, is what has caused the vehicle to lose traction in the market.

While Sentra is having “a great month” in May, Dominique says Nissan will need to manage in the long-term how the Versa and Sentra fit together in the brand’s lineup.

Meanwhile, Carlos Ghosn, presented with the 2007 Manufacturing Leadership Award here, says he is confident Nissan will make its net-profit target for its current fiscal year, but cautions that the period is only two months old, “so we’ll have to see.”

He reiterates his belief the U.S. new-vehicle market will end the year with a seasonal annually adjusted rate of 16 million units, a forecast that was conservative compared with others in the industry early in the year but now appears on target.

Ghosn also says Nissan has had no discussions with Chrysler Group buyer Cerberus Capital Management LP over possible joint ventures.

Ghosn last year made headlines when he began talks with General Motors Corp. CEO Rick Wagoner over taking a stake in the No.1 U.S. auto maker. The two sides eventually parted ways after GM said it could find few benefits.

Ghosn, in his speech, talks about the importance of developing the engineers of tomorrow, while presenting the SAE Foundation with a $1.5 million gift to be put toward kindergarten-third grade math and science programs.

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