Nissan CEO, President Carlos Ghosn Hopes to Grab Share of Lucrative U.S. Big Truck Market

CANTON, Miss. June 1, 2003; Barbara Powell,writing for the AP reported that Nissan CEO and President Carlos Ghosn says his intent to sell one million more vehicles by the end of 2004 and grab a share of the lucrative U.S. big truck market "is no threat to anybody."

But at last week's opening of the Japanese automaker's Mississippi assembly plant, Ghosn also said Nissan will do whatever it takes to win market share for its revived Quest minivan and its first full-size truck offerings -- the Titan pickup, Pathfinder Armada SUV and its Infiniti luxury version.

"Whose hide those one million units comes out of -- I don't know, I don't care," Ghosn said last Tuesday. "We are going to fight with everything we can."

But rivals won't willingly concede to Nissan a market for the 400,000 vehicles to be produced annually when its new U.S. plant reaches full production. Besides trucks and minivans, the $1.43 billion plant will make Altima sedans to supplement Altima production at Nissan's Smyrna, Tenn. plant.

Nobody questions Ghosn's track record. He amazed the industry by converting the faltering Nissan into a money maker in four years.

Nissan's Smyrna plant is an industry leader in production efficiency, and last year, Nissan's cost-cutting and manufacturing efficiencies earned an average $2,300 for each of the 2.77 million vehicles it sold worldwide.

"Nissan is probably one of the best at launching vehicles -- their Altima and Xterra launched in quick time -- and they've always been at the top of our charts, which is a huge cost advantage for them," said Laurie Felax of Harbour and Associates Inc., which annually ranks North American automakers on their production efficiency.

Industry analysts are skeptical of Ghosn's contention that sales growth can be done without resorting to the incentives that have driven the market since Sept. 11.

They said rivals Ford Motor Co., General Motors Corp. and the Chrysler arm of DaimlerChrysler AG will fight him on price and, most immediately in the case of Ford, will fight him with redesigned versions of their big trucks.

"You would be unwise to bet against him," said Jim Hossack, senior consultant for AutoPacific Group, an auto industry consulting firm in Tustin, Calif. "But if he didn't have such an incredible track record over the last four years, it would seem extremely ambitious."

Toyota Motor Corp. stumbled with its first full-size truck, the smallish Tundra. A bigger version is being made this year, and Toyota is also building an $800 million Texas plant that will turn out even bigger Tundras by 2006.

Nissan's Titan, which starts with a 5.6-liter V-8 engine, is already as big as any truck in its class.

"The Titan brings Nissan-level quality to the full-size truck segment and it's bigger, more powerful than the Tundra," Hossack said.

But another industry analyst, Art Spinella, says that until Ghosn took the reins when Renault of France became the major owner in 1999, Nissan's reputation for quality didn't help sales because it lacked the products customers wanted and enough money to effectively market them.

"The quality of the vehicles from Smyrna was there, but nobody cared because the problem was styling and marketing," said Spinella, president of CNW Marketing Research in Bandon, Ore.

Then there's Ford Motor Co., whose F-Series trucks own 40 percent of the 2.2-million-unit U.S. pickup truck market.

Ford will launch the first redesign of the line in early fall -- several months ahead of Nissan's December launch of the bulky Titan. The launch will be accompanied by Ford's biggest-ever marketing campaign and probably, Ford executives say, with enticing incentives attached to hedge its bets.

"We never question that Nissan is doing a great job," Ford spokeswoman Sarah Tatchio said. "They're making what has to be considered a very credible entry with the Titan. But we sold 813,700 F-Series trucks. Our target is one million. It's a stretch, but we think we can do it."

Ghosn said Nissan doesn't want a growth that is based just on incentives.

"We will not trade long-term benefits for short-term relief," he said.

But Ghosn conceded that Nissan would act defensively on price if forced to.

Spinella, who predicts the Titan will have incentives within a year of its launch, said the truck will have a hard time getting a piece of the price-sensitive fleet business or luring the brand-loyal customer who wants a work truck.

Larry Dominique, product specialist for Nissan's full-size pickups and SUVs, said the Titan -- with its big engine, hefty towing capacity and features like a spray-in bedliner -- is aimed at truck buyers shopping for style or a recreational vehicle.

"Where we felt we could compete was in the lifestyle truck, with people who don't live for their truck but also want to look good in their truck and use it on weekends for things like pulling their boat," Dominique said.

Industry analysts say Nissan will have an easier time recapturing a share of the 1.2 million unit U.S. minivan market with its Quest minivan, which goes on sale in July. It will compete with a refurbished Toyota Sienna launching at the same time and Ford's new Freestar minivan coming out this fall.

The Quest, with a price range of $24,600 to $37,000, will offer such features as dual DVD entertainment systems, fold-down second- and third-row seats and a futuristic center-mounted round instrument cluster.

"The new Quest solves a lot of problems. The old Quest was too small and underpowered," Hossack said. "But one concern I have is that minivan buyers are traditionally conservative and frugal. Quest is targeted at the more adventurous and more affluent buyer."

Nissan Motor Co., http://www.nissandriven.com