Nissan to Lower Maxima Output to Make Room for Altima
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Nissan to Lower Maxima Output to Make Room for Altima
By Rajiv Narayana
Gardena, California, June 7 (Bloomberg) -- Nissan Motor Co., Japan's third-largest automaker, plans to build 24 percent fewer Maxima cars for the U.S. market next year to avoid overlap with its new 2002 Altima midsize sedan.
The automaker expects to produce 80,000 2002-model Maximas for retail sales, down from 105,000 in the current model year, said Wayne Adair, marketing manager for Nissan's North American sedans. The forecast doesn't include vehicles sold to businesses and other fleet buyers.
Nissan was concerned the new Altima, which is larger with a more powerful engine than previous versions, would overlap with the low-end of the Maxima product line. Most of the reduction will be in the Maxima's base model, the GXE. The company is betting the Altima will attract younger and more affluent buyers, pushing sales of the vehicle up about 39 percent to 190,000 a year.
Altima's third major redesign since its introduction in the 1992 model year is intended to compete with Toyota Motor Corp.'s Camry and Honda Motor Co.'s Accord. The Maxima GXE model, which is currently about 25 percent of Maxima sales in the U.S., will fall to about 5 percent after the Altima introduction.
``What Camry is to Toyota, what Accord is to Honda, Altima will be that focus model for Nissan,'' Adair said, calling the product introduction one of Nissan's largest ever. ``Our biggest challenge is managing the Altima and Maxima relationship.''
Nissan shares fell as much as 1.4 percent in early trading on Thursday to 800 yen.
4-Cylinders
The company plans to sell about 80 percent of the new Altimas in the 4-cylinder engine model, while the remainder will be the V- 6 version. While Nissan sold 136,971 Altimas last year in the U.S., sales of the vehicles have dropped 1.8 percent so far this year.
The Altima will be built in Smyrna, Tennessee, while the Maxima is produced in Oppama, Japan. The Altima uses an all-new platform that will be used for future vehicles, said Jack Collins, vice president of marketing and product planning for Nissan's North American unit.
Nissan plans to introduce 22 new models worldwide, including 10 in the U.S., from April 2000 through March 2003 as part of its strategy to end losses. Nissan has released a new Infiniti luxury sport-utility vehicle and the Altima, and will unveil the new Z sports car, a full-size pickup and sport utility, and a replacement minivan for its Quest model. The U.S. is Nissan's most profitable market.
Sales Drop
Nissan has seen its U.S. sales fall 7.2 percent in the first five months of this year even as rivals Toyota and Honda posted gains. The decline came as the company's older models competed against new entries in the light truck segment and incentives drew customers to other automakers.
``We'll do what we have to do to stay competitive because we need to protect our dealers, we need to protect our products, but our goal is not to lead the (incentive) parade,'' said Jed Connelly, senior vice president of sales and marketing for Nissan North America.
He expects Nissan's first-half U.S. market share to be about the same as at the end of last year. With new products, Connelly expects market share to pick up in the second half of the year. Nissan captured 4.3 percent of the U.S. market in 2000.
The company's plan includes introducing new, more profitable models, with less development time, while reducing costs.
Later this year, Nissan will also start selling an Xterra sport-utility, Maxima sedan, Sentra small car and Frontier pickup with various styling, design and engine changes for the 2002 model year.
By Rajiv Narayana
Gardena, California, June 7 (Bloomberg) -- Nissan Motor Co., Japan's third-largest automaker, plans to build 24 percent fewer Maxima cars for the U.S. market next year to avoid overlap with its new 2002 Altima midsize sedan.
The automaker expects to produce 80,000 2002-model Maximas for retail sales, down from 105,000 in the current model year, said Wayne Adair, marketing manager for Nissan's North American sedans. The forecast doesn't include vehicles sold to businesses and other fleet buyers.
Nissan was concerned the new Altima, which is larger with a more powerful engine than previous versions, would overlap with the low-end of the Maxima product line. Most of the reduction will be in the Maxima's base model, the GXE. The company is betting the Altima will attract younger and more affluent buyers, pushing sales of the vehicle up about 39 percent to 190,000 a year.
Altima's third major redesign since its introduction in the 1992 model year is intended to compete with Toyota Motor Corp.'s Camry and Honda Motor Co.'s Accord. The Maxima GXE model, which is currently about 25 percent of Maxima sales in the U.S., will fall to about 5 percent after the Altima introduction.
``What Camry is to Toyota, what Accord is to Honda, Altima will be that focus model for Nissan,'' Adair said, calling the product introduction one of Nissan's largest ever. ``Our biggest challenge is managing the Altima and Maxima relationship.''
Nissan shares fell as much as 1.4 percent in early trading on Thursday to 800 yen.
4-Cylinders
The company plans to sell about 80 percent of the new Altimas in the 4-cylinder engine model, while the remainder will be the V- 6 version. While Nissan sold 136,971 Altimas last year in the U.S., sales of the vehicles have dropped 1.8 percent so far this year.
The Altima will be built in Smyrna, Tennessee, while the Maxima is produced in Oppama, Japan. The Altima uses an all-new platform that will be used for future vehicles, said Jack Collins, vice president of marketing and product planning for Nissan's North American unit.
Nissan plans to introduce 22 new models worldwide, including 10 in the U.S., from April 2000 through March 2003 as part of its strategy to end losses. Nissan has released a new Infiniti luxury sport-utility vehicle and the Altima, and will unveil the new Z sports car, a full-size pickup and sport utility, and a replacement minivan for its Quest model. The U.S. is Nissan's most profitable market.
Sales Drop
Nissan has seen its U.S. sales fall 7.2 percent in the first five months of this year even as rivals Toyota and Honda posted gains. The decline came as the company's older models competed against new entries in the light truck segment and incentives drew customers to other automakers.
``We'll do what we have to do to stay competitive because we need to protect our dealers, we need to protect our products, but our goal is not to lead the (incentive) parade,'' said Jed Connelly, senior vice president of sales and marketing for Nissan North America.
He expects Nissan's first-half U.S. market share to be about the same as at the end of last year. With new products, Connelly expects market share to pick up in the second half of the year. Nissan captured 4.3 percent of the U.S. market in 2000.
The company's plan includes introducing new, more profitable models, with less development time, while reducing costs.
Later this year, Nissan will also start selling an Xterra sport-utility, Maxima sedan, Sentra small car and Frontier pickup with various styling, design and engine changes for the 2002 model year.
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