Variance

Nissan cuts SUV, truck production

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Variance    0

Nissan cuts SUV, truck production

Japanese automaker's U.S. plants slash output of Titan, other big vehicles after rise in gas prices.

Christine Tierney / The Detroit News

Saddled with large inventories of light trucks, Japanese automaker Nissan Motor Co. has cut back production of the large Titan pickup and big sport utility vehicles built at its U.S. plants.

Last month, Nissan slashed output of the Titan at its Canton, Miss., plant by 29 percent, to 5,680 vehicles.

Three years ago, Nissan anticipated that it would be producing more than 8,000 Titans a month on average at the plant to sell more than 100,000 a year.

But the Japanese automaker has been hurt, much like its Detroit rivals, by slumping demand for large vehicles after the spike last summer in gas prices.

Nissan launched a slew of big vehicles in 2003 in the U.S. market, where it generates about 60 percent of its total profit. But both the Titan and Quest minivan fell short of their goals, slowing the Japanese automaker's momentum in the U.S. market.

Last month, its U.S. sales dipped 1 percent. Nissan's car sales were up, but truck sales declined 1.6 percent, reflecting a 9 percent drop in Titan sales, a 21 percent drop in sales of the large Armada SUV and a 31 percent slump in Quest sales ahead of the rollout of a restyled minivan.

Nissan has overall vehicle stocks estimated to last 60 days, but with the Titan "we've crept up close to 90 days, and we'd like to right-size the inventory," said Jed Connelly, senior vice president for sales at Nissan North America. "We're trying to have production match the current sales rate."

Nissan also cut production of the Armada by 11 percent in January and reduced output of the premium Infiniti QX56 large SUV by 10 percent from year-earlier levels. Overall, it pared truck, SUV and minivan output by 9 percent.

Nissan's production of light trucks, including the Titan, peaked in March, the last month of the Japanese fiscal year. But Titan production has declined for five consecutive months, and Connelly expects its full-year sales will fall slightly short of last year's levels.

While the Titan's struggle reflects the weakening demand for gas-guzzlers, it also illustrates the difficulty newcomers face in the big pickup segment, where brand loyalties to Detroit's automakers run high.

Competition is expected to increase as General Motors Corp. rolls out new large pickups and Toyota Motor Corp. launches a full-size pickup early next year.

Connelly estimates Nissan will sell between 85,000 and 90,000 Titans this year, down from around 92,000 in 2005.

"When you're breaking into a segment and you're attacking the sweet spot where the domestics have had a strong resonance for their brands, it's a long road," said Jeremy Anwyl, president of auto research Web site Edmunds.com.

"The Titan is a perfectly credible product, but it's going to take a while to be accepted," he said.

In an interview at the North American International Auto Show last month, Nissan CEO Carlos Ghosn said he expected U.S. vehicle sales would be flat in 2006, but car and truck sales would fluctuate sharply. "You'll see volatility in the mix," he said.

"Small cars sales will increase one month, and then there'll be a pushback from large SUVs."

This year, Nissan expects to increase U.S. sales slightly after introducing a new Sentra sedan and a Versa subcompact.

Despite cutthroat competition in the large vehicle segments, Nissan executives are trying to hold the line on incentives, even if it means losing a few thousand sales. "We'd rather protect the brand," Connelly said.

According to Autodata Corp., Nissan incentives run about $2,310 per vehicle, in line with the industry average and well below the discounts on domestic brands.

CNW Marketing, another firm that calculates discounts, estimates Nissan's incentives averaged just under $2,100 in December, less than those of all its major rivals.

"We don't have incentives like Dodge, Chevrolet and Ford," said Steve Gonzales, new car sales manager at Charlie Clark Nissan, a dealer in Harlingen, Texas. "Our incentives aren't huge."

Link: http://www.detnews.com/apps/pbcs.dll/artic.../602170370/1148

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Angry Dad    0

It is now official, the Titan can justly be labeled a "flop".

I do get a chuckle from the quotes in the article trying to play down incentives, not fooling anybody, Nissan has put as much cash as posible on the seat of these trucks and still can't sell.

It the next obviuos statement, with Titan floundering and Ridgeline getting no buzz, just why should the Tundra get a free pass? After all it is the third try after two mediocre offerings.

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Flybrian    0

This...is...just...another...example...of...how...flexible...production...ensure

s...(Japanese brand)'s...superiority...over...all.

From accounts I've heard, this thing and the Armada/QX56 get horrible mileage, like, 10-15

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regfootball    234

"We don't have incentives like Dodge, Chevrolet and Ford," said Steve Gonzales, new car sales manager at Charlie Clark Nissan, a dealer in Harlingen, Texas. "Our incentives aren't huge."

LIAR!!!!! the TITAN is one of the most heavily incetivized trucks!!!!!! look in your ads, the titan always has GM like gobs of cash on the hood, sometimes more!!!!

LIAR!!!!!

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Newbiewar    1

"We don't have incentives like Dodge, Chevrolet and Ford," said Steve Gonzales, new car sales manager at Charlie Clark Nissan, a dealer in Harlingen, Texas. "Our incentives aren't huge."

LIAR!!!!!  the TITAN is one of the most heavily incetivized trucks!!!!!!  look in your ads, the titan always has GM like gobs of cash on the hood, sometimes more!!!!

LIAR!!!!!

yep 2500 for regular silverado, 1500 for 2500HD's or 500 for dsl

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Guest gmrebirth   
Guest gmrebirth

How ironic ... Nissan, with what many believe as having the superior truck compared to the Tundra (including many here on C & G), is struggling to sell its unreliable Titans. Well, I've heard they've actually improved reliability, but the Titan initially earned the reputation of being unreliable, thus it's sales are struggling.

That now makes both Honda and Nissan reducing output in their truck plants. It's a rare sight these days to see one of the Big 3 "imports" reducing output at one of their plants. Honda clearly was too stubborn with making the Ridgeline so different from regular pickups, that it alienated a lot of customers. Honda's stubborn attitude led to it not understanding the truck market. Their refusal to make a production V8 also doesn't help. At best, the Ridgeline can be described as some sort of wagon, not a real truck.

This is more bad news for Nissan it seems. Their overall sales in the US have been flat, or slighty declining for 4 months straight. Looking ahead in the next year or two, they don't seem to have a lot of new products coming, and they could be caught with their pants down as Toyota's and GM's new model blitz continues.

What's most ironic in all this is that ... Toyota ... easily the most bashed import company on many forums, and specifically, on Cheers and Gears, seems to be the exception compared to the other import makers with regards to pickups. Toyota has yet to reduce output at Indiana, and they currently operate above capacity building the Tundra. With Nissan and Honda both struggling, and their pickup sales dropping, Toyota seems like the only import maker willing to go into the full size truck market head on.

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siegen    20

With Nissan and Honda both struggling

So production cuts lead to the companies struggling? They're still making a profit off of the vehicles.

That now makes both Honda and Nissan reducing output in their truck plants. It's a rare sight these days to see one of the Big 3 "imports" reducing output at one of their plants.

Like Flybrian alluded to, the flexibility of the Japanese plants allows them to cut production of a certain model (or models) and put the same time and resources of the same plant into another model (globalized platforms). They are hardly struggling, and can change with demand. Are you surprised truck sales are falling, gas prices are still above $2 here, and I'm sure much higher in more populated areas. Now when you see Accord or Sentra production cuts, there's something to look into.

As far as I'm concerned, small production cuts of big trucks or SUV's by Honda or Nissan are nothing to worry about, specially Honda (who doesn't even have a full-size truck).

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balthazar    1,869

So production cuts lead to the companies struggling? They're still making a profit off of the vehicles.

The titan represented a 1. brand new assembly plant, 2. a brand new platform & body, 3, a brand new engine & powertrain. This cost nissan billions and billions. No way in hell has the lackluster sales of the titan/armada/whathaveyou to date paid all those costs off yet.

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thecarguy    0

Was the Canton, MS plant dedicated just to the Titan and Armada? I mean did they build this plant just for the full-size trucks? If they did, why is it running at full capacity? Something doesn't add up?

Wait.... the plant is a flex plant, capable of building the Altima too. Nissan needed the capacity and is still running full out, despited the Titan's somewhat lack luster performance. When I say somewhat lack luster, keep in mind that no one every expected the Titan to sell 1M units annually or even 500K annually. Nissan's forecast called for 120K and yes they are shor of it, but their North American plants are still running at full capacity. Canton was not dedicated to Titan alone.

As for Toyota, the Big Three should be worried. While it might take the Japanese time to unlock the code to the US pickup market, Toyota is now closer than they ever have been before. The Tundra's are going to be produced in San Antonio, Texas. Do not underestimate the strategic significance of this move. 25% of all pickup trucks in the US are sold in Texas. I can tell you that Toyota does not seem so foreign to Texans anymore. The upcoming Tundra is not the Titan or the Ridgeline. I agreed on the Ridgeline and never believed that Honda would meet their forecast of 90K units annually. They haven't and they won't, at least not with the Ridgeline in its current form. GM and Ford will not survive by underestimating competitve threats. They did this in the luxury car segment and again in the SUV segment, just before the crossover craze swept the market.

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Newbiewar    1

I am sorry to say we shouldn't gloat.  One of the big three is going to report surprisingly poor results this quarter.

There hasn't been a "Big 3" since 1998.

are you guys refering to the big 3 american or big 3 japanese brands?

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haypops    0

Bathazar is quite correct the old big three (GM, Ford, and Chrysler) no longer exist. It is an old expression that is easy to fall back on.

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BrewSwillis    0

I'm sorry......maybe everyone missed this review posted in another thread:

CHICAGO --To the amazement of many, Toyota failed to reinvent the pickup truck Thursday.

"It's not the breakthrough I expected," said George Peterson, president of AutoPacific, an industry consulting company based in Tustin, Calif. "It'll be a good seller for Toyota, but it doesn't change the landscape."

http://www.freep.com/apps/pbcs.dll/article...3/1002/BUSINESS

the Tundra will hit the road with the same virtues that have made Toyota the most formidable automaker in the world -- "the time-tested quality and durability of Toyota," company U.S. sales chief Jim Press said.

That will certainly win it buyers, said Rebecca Lindland, an auto industry expert for Global Insight, a Lexington, Mass., consulting company. But it's likely not enough to lure owners away from Chevrolet, Ford and Dodge, which dominate full-size pickup sales.

Toyota will simply be trading on their perception of quality with an inferior product.......like they always do. While this works with their smaller sedans, it will not work the same with trucks. People will buy whatever car is cheap, or whatever car is percieved to have a higher quality. Truck owners buy something they know is tough and reliable.....a truck that has been tested in the real world. The Tundra, like the Titan will only sell to first time truck buyers who want to be different.

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thecarguy    0

First time truck buyers and Texans. One cannot underestimate the threat of locating the plant in Texas. What happened to Tundra sales after Toyota announced its investment in Texas? I will give you one guess.

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The O.C.    2

Toyota will simply be trading on their perception of quality with an inferior product.......like they always do.

rrrrrrrright.....

"perception" of quality....

"inferior" product.....

You may not like Toyota.....but it sounds really kinda childlish for you to try to infer that Toyota makes an "inferior" product.

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siegen    20

I think everybody knew Toyota wasn't going to "reinvent" the truck, they would simply try to improve on things Ford has done, and let their marketting do the rest.

But that's besides the point, we have enough Toyota threads on here already =)

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BrewSwillis    0

rrrrrrrright.....

"perception" of quality....

"inferior" product.....

You may not like Toyota.....but it sounds really kinda childlish for you to try to infer that Toyota makes an "inferior" product.

The Camry came in dead last in a 2004 Motor Trend family car comparo. It again came in dead last in the last family car comparo (late 2005 magazine?, '06 models?). And yet, it was the top selling sedan for like the last 4 years.

So yes, :censored:INFERIOR PRODUCT!! Nothing "childish" about telling the truth.

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balthazar    1,869

"inferior" product..... You may not like Toyota.....but it sounds really kinda childlish for you to try to infer that Toyota makes an "inferior" product.

What is the objective truth then- that every toyota product is 'superior' and singularly class-leading? Even you cannot believe this.

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Polish_Kris    0

The Camry came in dead last in a 2004 Motor Trend family car comparo.  It again came in dead last in the last family car comparo (late 2005 magazine?, '06 models?).  And yet, it was the top selling sedan for like the last 4 years.

So yes,  :censored:  INFERIOR PRODUCT!!  Nothing "childish" about telling the truth.

So? Customers don't go off buying the cars that Motor Trend and Car and Driver chose first in their comparos.

And as for the truck, I always thought that Nissan was the worst out of all the Japanese auto makers. We used to have a Nissan, and the thing was a nightmare. We had a Honda, and now have a few Toyotas, and theyre were and are great products. I think that Toyota is going to be the only successful Japanese auto maker with it's trucks.

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Snate    0

So? Customers don't go off buying the cars that Motor Trend and Car and Driver chose first in their comparos.

Right

I know people who pick cars specifically on what magazines such as MT and CR tell them.

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