Nissan wants to woo more US car buyers

By Dee-ann Durbin

Associated Press

Published: Wednesday, April 4 2012 12:00 a.m. MDT

FILE - This undated product image courtesy of Nissan shows the 2012 Nissan Versa sedan. Some Nissan models _ such as the Versa hatchback and Pathfinder SUV _ are struggling to win buyers, even as auto sales rebound. They're old, inefficient, or look just plain odd. And that's keeping the company from wooing more U.S. customers away from rivals.

Nissan, File, Associated Press

DETROIT — Mention Nissan to most car drivers and they think of the Altima. And not much else.

The sedan is America's second-best selling car and Nissan's top seller by far. When the new version goes on sale in July, it will likely be a hit.

But Nissan's other models — such as the Sentra small car and the boxy Cube — are struggling to win buyers, even as auto sales surge. They're old, inefficient, or just plain odd. And their designs are inconsistent, which keeps customers from sticking with the brand when they move up or down a car size. That's making it hard for Nissan to hang on to customers or woo new ones in the U.S.

Nissan is hoping to win over U.S. buyers with some new models in key segments. In addition to the Altima, Nissan will roll out new versions of the Versa hatchback, Sentra, and Pathfinder and Rogue SUVs over the next 15 months. The company promises more emphasis on fuel economy, more luxurious interiors, handsome and consistent styling and updated dashboard technology. The new Pathfinder, for example, will be lighter and nimbler, which will improve fuel economy and make it a smoother ride.

The new vehicles should help Nissan step out of the shadow of its Japanese competitors, Toyota and Honda, who have outsold Nissan in the U.S. nearly every year since the late 1980s. Toyota commanded a 14 percent share of the U.S. market in the first three months of this year, compared with 9 percent for Nissan. Nissan outsold Honda by 2,000 cars in that time, but to do that it resorted to some of its worst habits, including high incentive spending and low-profit sales to rental fleets.

Nissan lost U.S. customers in the 1990s, when it was faltering financially and producing bland cars. CEO Carlos Ghosn brought the company back to profitability in the early 2000s, after joining forces with French carmaker Renault S.A. in 1999 and embarking on a multi-year restructuring. Ghosn's feat is so celebrated in Japan that he is the hero of a comic book series there.

The profits have let Nissan invest in innovative products like the Nissan Leaf, which was the first all-electric car sold in the U.S., and the Murano CrossCabriolet, which is the only convertible SUV on the market.

But Ghosn wants more. He says Nissan's improved quality and broad lineup justifies a 10-percent share of the U.S. market. That would require Nissan to sell up to 400,000 more cars and trucks than the 1 million it sold last year. Increasing U.S. sales is part of Ghosn's plan to command 8 percent of worldwide market share by 2016, up from 6 percent in 2011. The current leader, General Motors Co., holds an 11.9 percent share.

More marketing will help. One of the highest-profile efforts will be the opening next month of a seven-story Nissan and Infiniti dealership in San Francisco, which was designed as a regional hub for people interested in the Leaf and future electric cars.

The new products will also help. The Altima is expected to get 38 miles per gallon on the highway, up 20 percent from the old model and the best fuel economy of any gas-powered midsize car. It has a sharper exterior and more luxurious interior. It also features a new hands-free system that connects to the driver's smartphone and new safety features like blind spot and backup warning systems. At $21,500, it starts at just $1,000 more than the outgoing Altima.

The sedan has been Nissan's best-selling vehicle for at least a dozen years. But Edmunds.com analyst Jessica Caldwell says the company's reliance on the Altima, when it has 19 other vehicles in its lineup, is a definite weakness.

Altima sales totaled 268,981 last year, or nearly one out of every three cars Nissan sold. The company's next best-seller, the Rogue small SUV, sold 124,543.

"A car company's sales should not ebb and flow based on the success of one model," Caldwell says.

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