Nissan Driving to Put End to Reputation as Follower
Nissan Motor Co. has staged a remarkable comeback from near-insolvency. Now look for the company to try to shed its also-ran image in the United States, a key market in its pursuit of financial growth.
No longer is the goal to have cars and trucks that compare well with Accords, Camrys and Explorers and sell on the strength of discount pricing.
Nissan wants to field vehicles that people desire instead of those Hondas, Toyotas and Fords: cars and trucks that buyers are willing to pay full price to get.
“The chase mentality is gone,” said William Kirrane, general manager for the Nissan division at Carson-based Nissan North America.
The parent company has turned around on the strength of corporate cost-cutting instituted by Carlos Ghosn, the former Renault executive who took command at Nissan after the French auto maker acquired controlling interest in 1999.
Now, Nissan will need to bolster its products and image to lure the customers who will make sustained financial success possible.
Analysts point to a revival on Nissan’s product side, citing powerful new editions of the Altima and Maxima sedans, a supercharged version of its popular Xterra sport-utility vehicle, next year’s revival of the famed Z sports car and the company’s first full-size pickup truck, to arrive in 2003.
But they say the Japanese auto maker needs a convincing image make-over with U.S. customers.
The company must win over more people such as Chuck Almada, an Internet and advertising consultant and self-described “car guy” from Seal Beach who said he considered Nissan cars and trucks for more than three decades before finally taking the plunge last year with a 2001 Pathfinder SUV.
“I looked at the first Z cars, but by then I had a family and needed something bigger,” Almada said. He took test drives in the second-generation Maxima in the late 1980s, when Nissan began promoting it as a four-door sports car.
Auto Maker Is Taking a Stand on Prices
It was about that time that the company fell into a slump marked by declining sales, staid designs and poor product choices for the U.S. Its brand-defining “halo” car--the Z--grew so expensive that few could afford it. And except for the Maxima, its vehicles dropped off most consumers’ shopping lists.
Almada, though, kept looking for improvement in a brand he knew was capable “of being the Japanese BMW.” Last year he and his wife bought their Pathfinder after Nissan boosted the SUV’s engine nearly 50% to 250 horsepower.
Now he’s seriously thinking about trading in an aging high-performance Chevrolet Camaro for a 2002 Maxima SE after reading that it will have the mid-size sedan segment’s most powerful V-6 engine when it hits showrooms next month.
For years, the company’s muddled styling left shoppers cold. Despite its strength in sporty V-6 sedans, Nissan and its dealers had to resort to steep discounting and incentive programs to move metal.
“Tent sales all summer long diminish the brand,” said Wes Brown, an industry analyst with Nextrend automotive marketing consultants in Thousand Oaks.
In its bid to regain a reputation for performance and reliability, Nissan will have to firm up its pricing and dramatically change the way its dealers treat the public, analysts said.
“They are doing the right thing by upgrading their vehicles in meaningful ways,” said consumer-satisfaction specialist Dan Gorrell of San Diego-based Strategic Vision. “You have to start with good products, but reputation takes longer to repair. And Nissan’s reputation is one of a brand with questionable reliability and dealers who don’t care about the customer.”
Kirrane of Nissan knows that and said the company already has launched a dealer retraining program to focus on customer satisfaction. It will involve revamping many facilities and stressing service and customer retention, he said.
The new corporate policy of holding firm on price--and not stooping to the discounting that can make shoppers question product quality and reliability--should help.
Two years after the Renault takeover, Nissan must start proving its mettle with new product, analysts said.
“Nissan has clearly done a better job than anyone expected in turning around the financial situation, but the ultimate in this game is selling vehicles, and you need good engineering and good styling to do that,” said Michael Flynn, director of the University of Michigan’s Center for the Study of Automotive Transportation.
The 2002 Nissans are the first group of vehicles that have been influenced by Renault, Flynn said, “so this will be the first market test” of the revived company.
The Altima, previously positioned as Nissan’s middle-of-the-road mid-size sedan, will bear the brunt of the burden when it arrives at dealers in mid-September. It will be the first all-new model for the U.S. since Renault took control and is intended to be Nissan’s first volume model, said Wayne Adair, Altima marketing manager.
“We intend it to be a category buster with engines that dominate the segment,” he said, referring to the 180- and 240-horsepower versions being offered.
To dominate the segment in power and performance also is the company’s plan for the Maxima, Nissan’s flagship, which gets a 260-horsepower V-6 as standard equipment for 2002. The model is in the middle of its platform cycle, so the 2002 gets what the industry calls a “refreshening” instead of a redesign.
To make room for the new V-6 Altima SE, the first version in that line to have such a large engine, Nissan will slash Maxima production by about 30,000 units and concentrate on marketing the pricier--and more profitable--SE and GLE models, Kirrane said.
Nissan executives have said they intend to keep prices of all new models close to present levels. That would put the four-cylinder Altima at $18,000 to $22,000, with the V-6 version taking over the $22,000-to-$24,000 slot vacated by those entry-level Maximas that won’t be built.
Kirrane said that Nissan has yet to approve the Altima ad campaign but that when the model is launched, it will be aimed at a younger, performance-oriented buyer. The buyer profile, marketing manager Adair said, is expected to shift from predominantly female and mostly married to an increase in male and unmarried owners.
Nissan also will have to look at mounting a stronger challenge to rivals Toyota Motor Corp. and Honda Motor Co., “because that’s where the market is,” Kirrane said.
Both are far ahead of Nissan in terms of consumer confidence, and both are working to keep shoppers interested in vehicles that, through the years, have saturated the mid-size sedan market.
Competing Models Pose Challenge for Customers
In October, Toyota will deliver the first all-new Camry in a decade, a re-engineered and restyled version intended to silence critics who have suggested that the car is becoming the poster child for bland and boring despite its long-standing sales leadership in the mid-size category.
Honda redesigned its Accord last year to keep it from getting stale--a move that apparently succeeded as it finished a close second to the Camry in the mid-size sales race. An all-new Accord is due in 2003.
Nissan doesn’t have its chief competitors’ reputations for reliability, so the company is banking on niche marketing: aiming its products at consumers who want their vehicles to stand out in a crowd and at those who value power and performance.
Design is still in transition, although the new Altima’s looks provide strong clues that Nissan intends to pursue aggressive styling treatments. “A hunting tiger” was the Altima design theme, said chief product specialist Masami Yagata.
The company “is doing the right thing in positioning itself as a car maker with attitude, as very different from Honda and Toyota,” said Nextrend analyst Brown. “Our research shows that car companies with a defined character and edgy attitude are going to do better.”
The true test, he cautions, could come when--and in the auto industry it’s always when, never if--it introduces a new model that proves to be a dud.
“They’ve got to be careful they don’t panic and change their entire strategy when that first dud comes along,” Brown said. “Nissan has done it many times before . . . and it confuses the customer.”
Kirrane and other Nissan North America executives said they have learned that lesson well.
*
HIGHWAY 1
Redesign: Nissan Altima is new inside and out for 2002. G1
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
On the Rebound
After years of steady decline, Nissan is seeing U.S. sales of its cars and trucks climb again. Analysts say the future depends on its push to set itself apart from other Japanese auto makers.
*
Car sales, in thousands
2000: 365,088
*
Truck sales, in thousands
2000: 308,649
Source: Automotive News Data Center
