Nissan Takes a Thumping

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 last year, it looks like it barely fits with the rising vanguard of Asian vehicle producers in the U.S.

But Nissan is predicting a 2007 sales turn around.

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

Despite October, Nissan's U.S. sales were down 6.3% to 851,644 units vs. the first 10 months of 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 year-long slump.

“As we look at (2007), 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.

Things are looking up as Nissan's new Versa subcompact has added 14,573 units this year and is in short supply.

As for the proposed Nissan/Renault/GM alliance, which petered out in 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 cross/utility vehicle 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 to about 785,000 in 2010.

Bradshaw says the timing couldn't be better for the Rogue, given the recent market shift away from midsize and fullsize SUVs.

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 show a new Q is due as an '08 model next year, as is a next-generation Nissan Murano midsize CUV.

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

Meanwhile, sales of Nissan's Titan fullsize pickup are off. 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 says the lack of dealers in some pickup-friendly markets has hurt Titan sales.