Nissan: Midsize Segment Still Important, But Altima Volume Undoubtedly Smaller

SANTA BARBARA, CA – In the grand scheme of things, the midsize-sedan segment in the U.S. still is formidable, despite a steep volume loss in recent years.

That’s the contention of Nissan, and is why the automaker is making no apologies for sticking with the segment, albeit acknowledging annual sales undoubtedly will be less than in years past.

“Everybody’s saying, ‘Oh, the segment is decreasing so much, why are you investing?’ Two hundred thousand sales a year is actually not too bad,” Bruce Pillard, senior manager-marketing for the Altima for Nissan North America, tells Wards in an interview during a ’19 Altima media preview.

While Nissan is hopeful about raising its Altima midsize sedan’s sales with the launch of the next-gen ’19 model in October – particularly because segment-rare all-wheel drive is offered, Pillard says annual volume from here on out probably will be closer to 200,000 than 300,000 as in years past.

“Three hundred thousand I think is a bit optimistic, to be fair,” he says. “Or maybe in a few years (we can get there again). But for now we’re around 200,000. Of course we want to increase and not to stay at 200,000 because providing the all-wheel drive will expand our base of customers. The 300,000 (mark) is something big.”

Nissan has sold 154,732 Altimas in the U.S. this year, down 16% from January-August 2017. In 2017, Nissan tallied 254,996 Altimas, off the 302,934 sold when the current-gen Altima debuted in 2012.

Volume in Wards Intelligence’s Middle Car segment, where the Altima lives, fell from 3 million in 2012 to 2.2 million last year.

As has occurred at many brands, its C-segment CUV, the Rogue, now is Nissan’s top-selling model, with 275,137 delivered in the U.S. through August.

Pillard says one can’t look at how the new Toyota Camry and Honda Accord have launched and extrapolate the same thing will happen to the Altima. The Camry and Accord, both redesigned for ’18, debuted to strong sales, but then dipped. Through August of this year, Camry sales were down 5.1% and Accord deliveries fell 14.1%.

“I think we provide something different and I think this is really important. The AWD is really something different,” he says.

Pillard calls the addition of AWD to the Altima lineup a “game-changer,” a feature that could even cause CUV intenders to think twice.

“Sometimes customers buy a crossover just because of the AWD, because they want to feel safe. So they won’t have to choose now. You can have the sophistication, value and also the driving dynamics of a sedan, (as well as) the peace of mind that is provided by the AWD,” he says, noting the car should do well in the northeastern U.S. and other regions with snowy winter weather. In these regions AWD will be the key marketing message.

The only other mass-market midsize sedans in the U.S. with AWD are the Ford Fusion (exiting the market after the current generation ends) and Subaru’s Legacy. The latter has it as a standard feature, but that hasn't resulted in a high sales volume. The Legacy was the ninth best-selling model in Wards Intelligence’s Middle Car segment in 2017.

AWD will be available on Altimas with the 2.5L naturally aspirated 4-cyl., but not the sedan’s upgrade engine, Nissan’s 2.0L variable-compression turbo 4-cyl.

There is no technical roadblock to pairing AWD with the 2.0L VCT, but because Altimas equipped with the base engine typically sell better Nissan paired the two technologies together to “hit the heart of the market,” Nissan officials say here. They add they will revisit the notion of mating the 2.0L VCT with AWD in the future should customers request it.

In addition to AWD, Nissan also will offer its Safety Shield advanced-safety technology suite, which includes its new ProPilot Assist semi-autonomous system, on SV and above grades of the new ’19 Altima. Those grades typically account for 45% of the car’s sales mix.

Despite targeting well-to-do female entrepreneurs when designing the car, Nissan’s grade strategy is broad to appeal to the wide swath of buyers who typically purchase midsize sedans.

“We want to talk to everybody,” Pillard tells attendees here of the grade structure for the new Altima. He later tells Wards: “You want sophistication (and) status, you’re going to take the Edition One (top trim level). You’re budget-constrained? OK, you’re going to take the S trim.”

The automaker believes the new sedan will attract Generation Y and Z buyers, those roughly born between 1990 and 2005, as today’s younger buyers don’t want to drive the same type of vehicle (an SUV or CUV) as their parents.

Nissan has been reducing the number of buildable combinations of the Altima over the years, and for ’19 has further whittled down variations to 127 from 200 in ’18. “A deception we want to avoid” is a potential buyer configuring a vehicle online, then realizing no nearby dealership has that particular combination in stock, says Pillard.

Nissan in the past has sold a fairly large percentage of Altimas to fleet customers, but Pillard makes no bones about the practice.

“Fleet is part of the business. It’s not the main part of our business…but it is still part of the business. I think that won’t change. But our top priority right now is to provide these cars to our dealers because they really want them and they are really excited.”

The Altima continues to be assembled at Nissan’s Canton, MS, and Smyrna, TN, plants.