While Others Sputter, Nissan Races Forward : Autos: The popular Altima helped the firm’s U.S. unit show an 18% sales surge in 1993.
While import auto makers are licking their wounds as 1994 begins, there is one Japanese company whose U.S. arm is flourishing in the face of stiff competition from the Big Three.
Nissan Motor Corp. U.S.A. reported an 18% increase in sales last year--far better than those reported by resurgent Ford Motor Co. and General Motors Corp. Only Chrysler Corp., with a 20% sales improvement, did better.
Nissan is the only Japanese auto maker to increase its share of the U.S. market last year, reaching 4.9% from 4.5% in 1992. Its popular Altima mid-size sedan was the top-selling new model in 1993, besting Chrysler’s highly touted LH series.
Not counting the separate luxury models, Nissan even supplanted Honda as the second-highest import seller, behind Toyota.
“We are back in the game in the consumer’s mind,” said Bob Thomas, president and chief executive of Nissan’s U.S. subsidiary.
These accomplishments were achieved despite the serious financial problems afflicting Nissan’s Tokyo-based parent. It also came in spite of adverse currency fluctuations.
Those problems have taken their toll.
The company laid off nearly 400 white-collar workers nationwide last year and dismissed its top U.S. official at its headquarters in Torrance, replacing him with a more compliant Thomas.
Nissan has tried to counteract the rise of the yen--which increases the cost of importing cars and parts--by increasing production at its assembly plant in Smyrna, Tenn., and buying more parts from American suppliers.
While this has helped, the real seeds of Nissan’s rebound were sown in the mid-1980s, when the company was as a niche player best known for its sporty cars. To survive, Nissan decided to change its image by moving into mainstream sedans, sport utility vehicles and minivans.
It had some success in 1989 with its restyled near-luxury Maxima sedan. Nissan also gained some attention with its upscale Pathfinder sport utility vehicle. Then, in 1992, the company introduced the sleek Altima sedan and stylish Quest minivan.
“The key to Nissan’s success has been the Altima,” said Susan Jacobs, an automotive consultant for Jacobs & Associates in New Jersey. “It was well launched and well executed.”
Most important, the Altima was priced attractively. While smaller than the Toyota Camry and Ford Taurus, it is also priced below them. The base-price Altima is still about $14,000.
Nissan sold nearly 134,000 Altimas in 1993. By comparison, it sold only 73,000 Stanzas--the car the Altima replaced--in 1991, the last year of full production.
Earl Hesterberg, general manager of the Nissan division, said the Altima has helped generate new traffic in showrooms. No longer are sports car enthusiasts the only ones interested in Nissan. He notes that nearly half of first-time Nissan buyers are now women.
That broadened appeal also helped boost Pathfinder and Quest sales. Even though the design of the Pathfinder is aging and it is expensive for a utility vehicle, the company enjoyed a 33% increase in sales last year.
The company sold nearly as many Quests, a minivan built in Avon Lake, Ohio, alongside Mercury-Lincoln’s Villager. In 1993, Nissan sold 44,600 Quests and 48,700 Pathfinders.
At the same time, the company enjoyed improved sales of the upscale Maxima and compact Sentra. A new Maxima will be introduced in May, with a new Sentra likely to follow next year.
“Nissan was there with the right products at the right time,” said George Magliano, analyst with WEFA Group in New York. “They were able to move with the economic recovery when other imports couldn’t.”
The question is whether Nissan can maintain the momentum. But with the strong yen and Nissan’s troubles in Japan, it may be difficult to hold the line on prices.
Nissan has already raised prices twice since introducing 1994 models in September. On average, the company has hiked prices $1,144, or 7.2%, in the last four months.
And, with Nissan’s parent company in the throes of a painful restructuring, the pressure to do more with less is likely to grow.
The Tokyo-based company is expected to lose up to $370 million in the fiscal year ending March 31.
“We feel more pressure than ever to contribute more profit to the company worldwide,” Hesterberg said.
Company officials say it will be difficult to repeat last year’s performance, but they hope to see sales increase at least 5% in 1994.
Chris Cedergren, an analyst with AutoPacific Group in Santa Ana, believes Nissan will continue to thrive in the U.S. market. He said the yen is likely to weaken slightly and that leasing programs can mitigate price increases.
“They have strong products and more coming in the next 2 1/2 years,” Cedergren said. “The future looks bright for Nissan.”
Nissan’s Year
U.S. SALES JUMP...
Nissan’s U.S. car and truck sales increased 18% in 1993, compared to an industry-wide jump of 8.5%. Only Chrysler reported a higher percentage sales increase. 1984: 689,022 1993: 680,357
...LED BY ALTIMA GAINS
Strong sales of the Altima helped Nissan capture a 5.2% market share of the mid-size sedan segment, up from 3.3% in 1992.
Model ’93 sales ’92 sales Altima 133,879 30,615 Maxima 86,794 84,583 Sentra 165,618 158,909 Stanza 787 50,993 NX 7,528 8,557 240SX 22,879 25,787 300ZX 9,124 9,628 Truck 110,001 120,184 Pathfinder 48,770 36,704 Quest 44,602 8,497 J30 21,494 13,774 Q45 12,255 12,215 G20 16,475 14,548 M30* 157 3,764
* Discontinued in 1993
Source: Nissan Motor Corp. U.S.A.
