Nissan Sentra Moves Uptown; No Low-Cost Leaf Leases Ahead

Nissan Americas Vice Chairman Bill Krueger expects the redesigned-for-’13 Nissan Sentra small car to return the nameplate to the upper echelon of its segment and command a higher price by attracting a more affluent customer.

The executive also dismisses the idea of discounting its slow-selling Nissan Leaf battery electric vehicle (BEV), after rival General Motors offered low-cost lease deals last month to sell a record number of Chevrolet Volt extended-range EVs.

“We’ve got a pretty competitive lease offer out there right now,” Krueger tells WardsAuto at an event here to unveil the new Sentra.

The current national lease offer for a $35,200 Leaf EV costs $249 a month with a $2,999 down payment. The term runs 39 months on the ’13 model. Leases for the ’13 Volt can be had for $299 a month over 36 months with $2,899 due at signing.

But in August, the $40,000 Volt carried a national 2-year lease deal priced as low as $249 a month on ’12 models. Some dealers offered additional incentives such as employee pricing, conquest cash and low interest rates for well-qualified buyers to further cut the price.

Nissan delivered 685 Leafs last month, compared with GM’s 2,831 Volt sales.

Krueger says the Leaf is aimed at an entirely different customer, so Nissan takes a more rigid approach to its pricing. “We’re targeting the pure zero-emissions customer who also is a pragmatist and knows that the cost of ownership, with the current price of fuel, makes sense at the current lease price.”

According to Compete, which compiles cross-shopping data, consumers considering a Volt also will look at a Toyota Prius because both are considered plug-in hybrid electric vehicles, whereas the Environmental Protection Agency classifies the Leaf as a BEV.

Unlike the Volt, which uses an internal-combustion engine as a generator to provide electricity after the battery charge becomes depleted, the Leaf runs entirely on its batteries.

The Volt has an all-electric range of up to about 40 miles (64 km) before the ICE takes over, while the Leaf travels some 90 miles (145 km) before its needs a recharge. The Prius uses its ICE and battery in combination.

However, more Leaf-intenders are cross-shopping the Prius these days, likely driven by the import association between the Nissan and Toyota brands, Compete says. Leaf buyers rarely consider the Volt.

Krueger also notes production capacity will not drive Leaf pricing, because Nissan builds the car on the same assembly line in Smyrna, TN, as the Altima and Maxima sedans.

“We won’t have idled capacity at the plant,” he says. “That’s what’s nice about the Leaf. It’s not a bet that will end up idling a plant if the sales don’t happen to be as high as the capacity built in.”

Neither the Leaf nor Volt, which hit the U.S. market at roughly the same time two years ago, have lived up to sales expectations. In 2011, the first full year of sales for each vehicle, the Leaf accounted for 9,674 deliveries compared with the Volt’s 7,671,WardsAuto data shows.

But so far this year, Nissan has sold 4,228 Leafs, while GM has delivered 13,497 Volts.

GM thought it would sell 10,000 Volts in 2011 and as many as 45,000 in 2012. Nissan originally predicted 10,000 Leaf deliveries in 2011 and looked to double that in 2012. Both auto makers have backed off those estimates.

Krueger has greater ambitions for the new Sentra, a solid-selling but unremarkable nameplate over its 30 years on the market.

When the Sentra was part of the Lower Small segment, as defined by WardsAuto data, it was the top-seller between 1983 and 1986 and again between 1989 and 1992. But since the marque moved to its current place in the Upper Small segment, where it competes against the likes of the Honda Civic and Toyota Corolla, it has failed to grab the top spot.

The Sentra routinely accounted for more than 100,000 deliveries annually over the Past decade before the global recession and sold 114,991 units last year, despite an inventory crunch due to the natural disasters in Japan.

The redesigned model gets sexier exterior styling, borrowing curves from the all-new Altima, and premium interior content such as the auto maker’s optional NissanConnect infotainment system. It also receives a new, more fuel-efficient 1.8L 4-cyl. engine and redesigned continuously variable transmission.

“We plan with this generation to move up in the segment, up in volume and up in class,” Krueger says of the car, which will be in its eighth iteration when it arrives at dealers later this year.

The current Sentra starts at $16,250, and Krueger thinks the ’13 model will command a higher price, although no details on pricing have been released. A new buyer should emerge, too, he says, giving the Versa B-car the entry-level market to itself.

“Historically, (the) Sentra has had to pull the bottom end, and that’s no longer,” he says. The new model is targeted at “those buyers coming up who want more room, more sportiness and really don’t need to go all the way up to Altima.”

Anticipating a big splash from the new Sentra, Nissan has added the Canton, MS, plant as an assembly site for the car in addition to Aguascalientes, Mexico.

“We’re going to have volume and flexibility,” Krueger says. “We expect the demand will be much higher than the current generation.”

Once the new Versa hatchback arrives next year, Krueger says Nissan will have the strongest passenger-car lineup in its history.

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