The $28,000 Question ?
08-10-2002, 03:07 PM
#1
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The $28,000 Question ?
A little automotive news....
(08:30 Aug. 07, 2002)
$28,000 question: Are there too many Nissans at that price?
By JOE KOHN
Automotive News
LOS ANGELES - Nissan North America Inc. has taken a liking to a particular kind of customer: one with about $28,000 to spend on a car.
In the 2001 model year, the company didn't have a car with a base retail price between $25,000 and $30,000. The $30,010 Infiniti I30 was as close as it came. But for the 2003 model year, Nissan and Infiniti divisions combined have five cars in that range.
Some analysts have raised warning flags about the pricing clutter, which can lead to consumer confusion and sales cannibalization.
"I wouldn't say they're playing with fire, but they need to make sure they've sat down and planned out both portfolios and the risks of potential cannibalization," said Wes Brown, an analyst at Nextrend in Thousand Oaks, Calif. "You have to assume that they've done that."
For the 2003 model year, Nissan and Infiniti divisions have three sedans and two coupes in the $25,000-$30,000 price bracket: the Nissan Maxima and Infiniti I35 and G35 sedans, and the Nissan 350Z and Infiniti G35 coupes .
And while the Nissan Altima nominally is positioned well below the Maxima and G35 sedans, it is possible to spend $26,000 to $27,000 on a well-equipped V-6 model, thereby adding a fourth sedan to the clutter.
Jack Collins, Nissan's vice president of product planning, acknowledged that companies must use caution when tagging several vehicles with a similar price to avoid confusion at the showroom or even cannibalization of sales.
"That basic price range is chock-full of products from all manufacturers. That's the heart of the market," he said. "The cars themselves have to be quite different in concept and different in driving feeling and appeal."
Last year's introduction of the redesigned and upgraded Nissan Altima into the lineup hurt sales of the supposedly more upscale Maxima, although the shift was expected by Nissan planners.
After the company scrapped the lowest trim-level Maxima last year when the redesigned Altima debuted, the Maxima's sales dropped from 129,235 units in 2000 to 102,535 units in 2001.
But the Maxima's slide halted this year - sales through July total 65,103 units, compared with 63,029 in the year-ago period.
With the debut of the Infiniti G35 in March, I35 sales dropped by about 23 percent - from 2,613 units a month from January through March, to 2,009 units a month from April through June. The G35 quickly became the division's best seller, netting 3,209 sales a month from April through June.
"There is some movement between those vehicles in the showroom, but not a tremendous amount," Collins said. "The two cars in character, in design and in appeal are significantly different."
Collins said the G35 coupe will satisfy a consumer who wants pure performance, plus the benefits of having bought from a luxury channel - benefits that aren't necessarily important to potential buyers of the Nissan 350Z coupe, which will share the same 3.5-liter V-6 engine.
Collins said Nissan also is counting on 90,000 sales a year from the next-generation Maxima, due next year as a 2004 model, while continuing to offer the I35.
Jim Hossack, an analyst at AutoPacific, a consulting firm in Tustin, Calif., said the pricing clog won't cause problems for Nissan if properly managed.
"It probably is a little overkill, and they probably would like to have more space in between (the vehicles' prices)," he said.
"But the secret to success is having great cars and trucks, and that can overshadow having prices on top of each other. So, is this a difficulty for them? Yes. Is it a job-stopper? No."
(08:30 Aug. 07, 2002)
$28,000 question: Are there too many Nissans at that price?
By JOE KOHN
Automotive News
LOS ANGELES - Nissan North America Inc. has taken a liking to a particular kind of customer: one with about $28,000 to spend on a car.
In the 2001 model year, the company didn't have a car with a base retail price between $25,000 and $30,000. The $30,010 Infiniti I30 was as close as it came. But for the 2003 model year, Nissan and Infiniti divisions combined have five cars in that range.
Some analysts have raised warning flags about the pricing clutter, which can lead to consumer confusion and sales cannibalization.
"I wouldn't say they're playing with fire, but they need to make sure they've sat down and planned out both portfolios and the risks of potential cannibalization," said Wes Brown, an analyst at Nextrend in Thousand Oaks, Calif. "You have to assume that they've done that."
For the 2003 model year, Nissan and Infiniti divisions have three sedans and two coupes in the $25,000-$30,000 price bracket: the Nissan Maxima and Infiniti I35 and G35 sedans, and the Nissan 350Z and Infiniti G35 coupes .
And while the Nissan Altima nominally is positioned well below the Maxima and G35 sedans, it is possible to spend $26,000 to $27,000 on a well-equipped V-6 model, thereby adding a fourth sedan to the clutter.
Jack Collins, Nissan's vice president of product planning, acknowledged that companies must use caution when tagging several vehicles with a similar price to avoid confusion at the showroom or even cannibalization of sales.
"That basic price range is chock-full of products from all manufacturers. That's the heart of the market," he said. "The cars themselves have to be quite different in concept and different in driving feeling and appeal."
Last year's introduction of the redesigned and upgraded Nissan Altima into the lineup hurt sales of the supposedly more upscale Maxima, although the shift was expected by Nissan planners.
After the company scrapped the lowest trim-level Maxima last year when the redesigned Altima debuted, the Maxima's sales dropped from 129,235 units in 2000 to 102,535 units in 2001.
But the Maxima's slide halted this year - sales through July total 65,103 units, compared with 63,029 in the year-ago period.
With the debut of the Infiniti G35 in March, I35 sales dropped by about 23 percent - from 2,613 units a month from January through March, to 2,009 units a month from April through June. The G35 quickly became the division's best seller, netting 3,209 sales a month from April through June.
"There is some movement between those vehicles in the showroom, but not a tremendous amount," Collins said. "The two cars in character, in design and in appeal are significantly different."
Collins said the G35 coupe will satisfy a consumer who wants pure performance, plus the benefits of having bought from a luxury channel - benefits that aren't necessarily important to potential buyers of the Nissan 350Z coupe, which will share the same 3.5-liter V-6 engine.
Collins said Nissan also is counting on 90,000 sales a year from the next-generation Maxima, due next year as a 2004 model, while continuing to offer the I35.
Jim Hossack, an analyst at AutoPacific, a consulting firm in Tustin, Calif., said the pricing clog won't cause problems for Nissan if properly managed.
"It probably is a little overkill, and they probably would like to have more space in between (the vehicles' prices)," he said.
"But the secret to success is having great cars and trucks, and that can overshadow having prices on top of each other. So, is this a difficulty for them? Yes. Is it a job-stopper? No."
08-23-2002, 02:15 AM
#2
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Join Date: Sep 2001
Posts: 3
This is pure speculation, but I have given some thought to this for quite a while. Why would Nissan price a loaded Maxima at the same price as a similarly equipped I-35? The same question applies to the Altima/G-35 and the new 350-Z/G-35 coupe. The only thing that makes sense to me is this.....
Infiniti has been lagging Lexus since they both came out. What better way to increase the sales of the "luxury brand" than to price it competetively with your own bread-and-butter cars. And.... Presto!!!! Buyers who would never have considered an Infiniti before, will buy it because it is a comparitive "bargain", increasing sales of the luxury brand. Now the clincher... Watch for a big price increase in the Infiniti line in a few years to widen the price gap with Nissan. How many of those people who are then driving an Infiniti are going to go back to Nissan? Not many. Americans are too image conscious. (And Infiniti is certainly priced less than Lexus, so has the room to move up in price.) End result? The bottom line at Infiniti goes thru the roof, and Nissan Corp. laughs all the way to the bank.
Like I said this is pure speculation, but those Japanese are smart business people, and this is the only scenario that makes sense to me. Most of this will be lost on most of you, but for the few who are "thinkers", this should be good food for thought. Inteligent replies welcomed.
Infiniti has been lagging Lexus since they both came out. What better way to increase the sales of the "luxury brand" than to price it competetively with your own bread-and-butter cars. And.... Presto!!!! Buyers who would never have considered an Infiniti before, will buy it because it is a comparitive "bargain", increasing sales of the luxury brand. Now the clincher... Watch for a big price increase in the Infiniti line in a few years to widen the price gap with Nissan. How many of those people who are then driving an Infiniti are going to go back to Nissan? Not many. Americans are too image conscious. (And Infiniti is certainly priced less than Lexus, so has the room to move up in price.) End result? The bottom line at Infiniti goes thru the roof, and Nissan Corp. laughs all the way to the bank.
Like I said this is pure speculation, but those Japanese are smart business people, and this is the only scenario that makes sense to me. Most of this will be lost on most of you, but for the few who are "thinkers", this should be good food for thought. Inteligent replies welcomed.
08-23-2002, 02:36 AM
#3
Senior Member
Join Date: Feb 2002
Posts: 216
Actually, from I've read in the car mags, Nissan is in a state of flux right now. They're currently revamping their product line to introduce more exciting and interesting vehicles. The new upscale Altima competing with the Maxima is an indication of this. So is the new 350Z introduction. Of course, this takes time because they just can't introduce completely new vehicles all the way across their product line. I would expect to see a little pricing/identity weirdness in the Nissan lineup for another couple of years until they finish revamping the product line. You have to admit, a lot of good things have been happening at Nissan for the last few years.
08-23-2002, 02:51 AM
#4
The article really doesn't discuss anything of substance. What auto maker doesn't have a slew of offering from $25-30k? They even mention cars totally in different classes. Moreover, although in the same price range, you have a choice to go with a stripped this car or another car fully loaded? Furthermore, the maxima is transitioning to an all-new model and you can easily get them for under $25k so they are making statements which is true only because the max is experiencing a model closeout.
The real difference with Nissan is that they are becoming the value/performance leader. This article is making it seem like Nissan is blowing it when in actuality, they have it going on in spades!
The real difference with Nissan is that they are becoming the value/performance leader. This article is making it seem like Nissan is blowing it when in actuality, they have it going on in spades!
08-23-2002, 02:51 AM
#5
Senior Member
Join Date: Nov 2000
Posts: 3,883
Originally posted by Docs97SE
This is pure speculation, but I have given some thought to this for quite a while. Why would Nissan price a loaded Maxima at the same price as a similarly equipped I-35? The same question applies to the Altima/G-35 and the new 350-Z/G-35 coupe. The only thing that makes sense to me is this.....
Infiniti has been lagging Lexus since they both came out. What better way to increase the sales of the "luxury brand" than to price it competetively with your own bread-and-butter cars. And.... Presto!!!! Buyers who would never have considered an Infiniti before, will buy it because it is a comparitive "bargain", increasing sales of the luxury brand. Now the clincher... Watch for a big price increase in the Infiniti line in a few years to widen the price gap with Nissan. How many of those people who are then driving an Infiniti are going to go back to Nissan? Not many. Americans are too image conscious. (And Infiniti is certainly priced less than Lexus, so has the room to move up in price.) End result? The bottom line at Infiniti goes thru the roof, and Nissan Corp. laughs all the way to the bank.
Like I said this is pure speculation, but those Japanese are smart business people, and this is the only scenario that makes sense to me. Most of this will be lost on most of you, but for the few who are "thinkers", this should be good food for thought. Inteligent replies welcomed.
This is pure speculation, but I have given some thought to this for quite a while. Why would Nissan price a loaded Maxima at the same price as a similarly equipped I-35? The same question applies to the Altima/G-35 and the new 350-Z/G-35 coupe. The only thing that makes sense to me is this.....
Infiniti has been lagging Lexus since they both came out. What better way to increase the sales of the "luxury brand" than to price it competetively with your own bread-and-butter cars. And.... Presto!!!! Buyers who would never have considered an Infiniti before, will buy it because it is a comparitive "bargain", increasing sales of the luxury brand. Now the clincher... Watch for a big price increase in the Infiniti line in a few years to widen the price gap with Nissan. How many of those people who are then driving an Infiniti are going to go back to Nissan? Not many. Americans are too image conscious. (And Infiniti is certainly priced less than Lexus, so has the room to move up in price.) End result? The bottom line at Infiniti goes thru the roof, and Nissan Corp. laughs all the way to the bank.
Like I said this is pure speculation, but those Japanese are smart business people, and this is the only scenario that makes sense to me. Most of this will be lost on most of you, but for the few who are "thinkers", this should be good food for thought. Inteligent replies welcomed.
08-23-2002, 04:36 AM
#6
Senior Member
Join Date: Oct 2001
Posts: 1,029
Re: The $28,000 Question ?
Originally posted by Amadeus-Max 1
Collins said Nissan also is counting on 90,000 sales a year from the next-generation Maxima, due next year as a 2004 model, while continuing to offer the I35.
Collins said Nissan also is counting on 90,000 sales a year from the next-generation Maxima, due next year as a 2004 model, while continuing to offer the I35.
08-23-2002, 12:34 PM
#7
on monday i got my alternator replaced and when i was waiting, i meandered down to the showroom and started talking with the salesman. First of all he said that it is frustrating in sales to have both an 18,000 and 27,000 dollar altima. whats the difference between the two. and then we started talking about the maxima and that its a great car, blah blah blah. I then asked about the 2003 and he told me by next april, nissan is going to have the next max out. He said that it would no longer be on the same platform as the g35, but they are extending the wheelbase, interior, etc. and be similar to the q45 platform and increase the price $8000 to $10000. he also said that nissan wasnt going to release this information until about amrch, but their sales associates have already been notified to be able to adapt to the increase.
here's my question: WOULD YOU BUY A $36,000 MAXIMA?
here's my question: WOULD YOU BUY A $36,000 MAXIMA?
08-23-2002, 03:24 PM
#10
Originally posted by CoolMax
Here's my question: Who in the hell would buy a $36,000 Passat?
Here's my question: Who in the hell would buy a $36,000 Passat?
why are the car manufaturers creating this market of stripped down luxury cars?
08-23-2002, 04:36 PM
#11
Dyno plot says I have the most area under the Administrator curve
Join Date: Jul 2001
Posts: 7,060
Honda sells Acura's by crippling their Honda's.
Toyota sells Lexus by giving them more than their Toyota's.
Nissan does NOT sell Infiniti's by making their Nissan's just as good as their Infiniti's.
Toyota sells Lexus by giving them more than their Toyota's.
Nissan does NOT sell Infiniti's by making their Nissan's just as good as their Infiniti's.
08-24-2002, 11:30 AM
#12
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Posts: n/a
Originally posted by Frank Fontaine
I sincerely hope nobody actually pays that much for any Nissan. 28 grand, if one is going to spend that much, there are so many cars to choose from. A Nissan should be about 21, 23 tops. 28 grand is in the Audi A4 and just below the BMW 325 territory. Obviously they are not in the same category as a Maxima or Altima or I35 as we've said so many times before.
I sincerely hope nobody actually pays that much for any Nissan. 28 grand, if one is going to spend that much, there are so many cars to choose from. A Nissan should be about 21, 23 tops. 28 grand is in the Audi A4 and just below the BMW 325 territory. Obviously they are not in the same category as a Maxima or Altima or I35 as we've said so many times before.
08-24-2002, 11:48 AM
#13
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Join Date: Nov 2000
Posts: 3,883
Originally posted by ivelweyz
And who here would rather have a tiny 4banger than a powerful v6 max. An a4 is in no way a comparison to a maxima...
And who here would rather have a tiny 4banger than a powerful v6 max. An a4 is in no way a comparison to a maxima...
08-24-2002, 06:05 PM
#14
Guest
Posts: n/a
Originally posted by Frank Fontaine
The biggest favor you could do for yourself, well, maybe 2nd biggest, is drive a 4-cyl. A4. You may cringe at the price but I don't think you'll feel the same. I'd take a 325i over a Maxima any day of the week. Like I said, drive it before you make such bold statements.
The biggest favor you could do for yourself, well, maybe 2nd biggest, is drive a 4-cyl. A4. You may cringe at the price but I don't think you'll feel the same. I'd take a 325i over a Maxima any day of the week. Like I said, drive it before you make such bold statements.
08-24-2002, 07:00 PM
#15
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Join Date: Nov 2000
Posts: 3,883
Originally posted by ivelweyz
Was it really a bold statement, huh I didn't realize. Well guess what, I did drive an A4 AND AN S4. My friend and his older brother have them. The S4 is a dream the, A4 is nice but i'd rather drive my 4th gen. I'd take a 325 BMW over a max any day too, well maybe except monday thru saturday, sunday I wouldn't mind driving it. If you think that a 325 is that much better than a max, 4th gens have almost identical specs, than I think it's sad. The 325 is the lamest BMW besides the 318. The 330 I would love to have. Bold statement this you FRUITcake...
Was it really a bold statement, huh I didn't realize. Well guess what, I did drive an A4 AND AN S4. My friend and his older brother have them. The S4 is a dream the, A4 is nice but i'd rather drive my 4th gen. I'd take a 325 BMW over a max any day too, well maybe except monday thru saturday, sunday I wouldn't mind driving it. If you think that a 325 is that much better than a max, 4th gens have almost identical specs, than I think it's sad. The 325 is the lamest BMW besides the 318. The 330 I would love to have. Bold statement this you FRUITcake...
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