Nissan Suspends Development of HD Pickup
By: Mike LevinePosted: 03-15-07 13:01 PT
© 2007

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As originally reported in Automotive News, increasing economic pressures are forcing Nissan to reconsider its plans to offer a heavy duty version of the Titan pickup.

Larry Dominique, Nissan’s vice president of product planning and strategy, describes how the decision was made based on a number of factors.

Evaluating the Business Case
“A lot of heavy duty [sales volume] is predicated on the relationship [manufacturers] establish with light duty truck owners,” says Dominique. “Our research shows that one in three buyers wouldn’t consider buying a foreign truck, and we’re looking at the market seeing gas prices going up and full size truck volumes way down. Today, with Titan, we’re only competing in a narrow segment [extended and crew cab] of light duty trucks – a little less than a million units sold in [these configurations] last year, of which we’re selling about 75,000 to 90,000 Titans a year. To compete with a heavy duty we’d need multiple variations - at least three wheelbases. But we have to have a business case that works to make this decision, based on higher light duty sales volumes because people will move from a light duty to a heavy duty truck. Looking at where we are today, we’ve decided to invest in other segments outside of pickups for a greater return than we believe we could get building a heavy duty truck.”

Also factored into Nissan’s HD business case is their hesitancy to compete with the domestics when it comes to price - mindful of rebates the domestic incumbents are likely to use to goose HD volumes should they start to fall.

“Heavy duty pickups are the most profitable trucks that Detroit makes, and the domestic [manufacturers] are extremely dependent on this segment. We’d like to stay above the incentive fray. The Titan is profitable today, as are all our cars and trucks. That’s not necessarily the case with the domestics with all of their cars and trucks. It’s another reason we believe we can invest in this money [meant for HD Titan program] in other areas for a greater return than if we have to lose money over volume.”

Jim Hossack, vice president and pickup truck consultant at AutoPacific, comments that Nissan’s decision to shelve the heavy duty Titan is probably correct, given the rigorous business case analysis they performed. “If you don’t have your heart in it [building a heavy duty pickup], it just won’t work,” Hossack says.

That’s not to say that Nissan is abandoning commercial truck buyers who would likely purchase a one-ton Titan. Dominique says, “While our heavy duty program is suspended for now, if the business case changes, we can quickly resurrect it. And our new 2008 Titan long box option should get us more light duty commercial buyers who need an 8-foot box for work.”

Potential for a V6 Diesel in Light Duty Titan
Nissan is also studying a V6 diesel engine option for the light duty Titan – another feature that could help grow its full size pickup volumes and lure commercial buyers.

“You have to have a diesel engine if you’re going to play in the sandbox with the other manufacturers, and we’d like to do a diesel if the economics make sense. Diesels cost more than gasoline [engines] but heavy duty and commercial buyers know what a diesel brings – it’s the increased torque for towing, not just better mileage,” says Dominique. “And our research also shows that, relative to gasoline engines, diesel pickups keep about 81% of their [purchase] value after three years,” he adds.

But manufacturers are facing difficult pricing challenges to meet the federal government’s tough new Tier 2 Bin 5 emissions regulations to reduce NOX and particulates output from diesel engines. Ford Motor Company, for example, had to raise prices on the new 2008 Super Duty Power Stroke diesel pickups by $1,500 over last year’s motor because of the new filtration and exhaust management systems added. And it’s a virtual certainty that prices will be hiked again to meet final emissions requirements for 2010.

So far this isn’t stopping Nissan. Dominique cautiously observes, “In the heavy duty market, in 2007, it seems that the price increases [for a diesel] have been absorbed. But the light duty market is a different case. It’s more tenuous and there’s no precedent, and even though a V6 diesel is smaller [than a V8] the costs [to meet emissions] are going to be very similar. In my opinion the ability to price a diesel for a light duty truck is unknown, but offering one is the right thing to do.”

Only Dodge has publicly committed to offering a diesel in its light duty Ram pickup by the 2009 model year, though rumors are circulating that Ford will also follow suit with its own European-sourced diesel for the next generation F-150.

Nissan also has other plans to make the light duty Titan more appealing to buyers. “We’re studying a V6 gas option, too," says Dominique, “and we’d like to offer a regular cab. The question is how much change we make to the current truck when we’re already working on the next generation.”

Nissan Frontier News
Dominique also had some news to share about the Nissan Frontier midsize pickup and its future.
While the next generation Nissan Pathfinder is likely to move from a body-on-frame chassis to unibody construction, don’t look for the Frontier to do something similar, ala Honda Ridgeline or recent musings from Dodge about the future Dakota.

“Monobody doesn’t work well for trucks. To handle a high GVW and towing capacity, you can’t go monobdy. Today you can tow nearly 7,000 pounds with the Frontier. This is what our customer needs are, and it's all about continuing to meet those needs. We couldn’t do that without keeping a separate bed,” says Dominique.

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