Fighting Toyota's Camry for top spot, Nissan must balance demand, capacity
Nissan North America last week started building its high-volume Altima with hopes of taking the volume even higher -- even as competition in the segment heats up.
The Altima has been redesigned for the 2013 model year and will go on sale June 26. But the Honda Accord, Ford Fusion and Chevrolet
Malibu also have been redesigned for 2013. And two other key mid-sized car segment competitors -- the Volkswagen Passat and Toyota Camry -- were redesigned for 2012.
There's another factor, too: Will Nissan be able to build enough Altimas to challenge the market-leading Camry?
The race is particularly significant for Nissan because the Altima has been surging up the sales charts for the past year and Nissan hopes to capitalize on the gains.
The Altima has lagged for most of its 20-year life as the also-ran among family sedans. But in the months after the March 2011 Japanese earthquake it leapt into the segment's No. 2 spot, bypassing the Accord and coming close to the Camry.
Bill Krueger, vice chairman for Nissan Americas, says Nissan intends to keep up the momentum with the redesigned model, but not through incentives.
"I'm willing to build demand by putting value out in the market place. But I'm not willing to cut and trim profit margin to try and beat a number that one of our competitors is doing," he said. "We don't have any intention of piling incentives on it to try to chase a number.
"Our best foot forward is going to be the product."
The redesigned Altima boasts segment-leading fuel economy and vehicle weight, but product planners conceded that they don't know yet what Honda will deliver in the 2013 Accord later this year.
Nissan already is promoting the new model's 38-mpg highway-driving fuel economy number. By comparison, the Hyundai Sonata turned heads just one year ago by advertising the 35-mpg highway figure.
Highway driving can be a misleading measurement of a vehicle's actual overall fuel efficiency. But automakers typically capture consumer's attention by using that higher highway number in ads.
Krueger remained cagey about how many Altimas Nissan expects to produce this year or how many Altimas Nissan will be capable of building in the future, loosely pegging his capacity at "at least 300,000" a year.
The question of Altima capacity is not academic. Both Toyota and Honda have enough factory capacity to outsell the Altima if the market demands it. In a robust market of rising sales, the automaker that can fill dealer orders wins the sales race.
Nissan's U.S. factories have been running overtime to supply 2012-model Altimas and will continue building the outgoing model for another month as the company shoots for 25,000 advance sales of the 2013 model. But Nissan is expanding factory capacity in order to begin building the Altima in bigger numbers later this year.
Krueger told Automotive News several weeks ago that he will build as many Altimas as the market demands. In March, the company sold 41,000 2012 Altimas -- a theoretical volume of nearly 500,000 if that pace kept up for 12 months.
Nissan is hiring 1,000 workers to add a third shift in Smyrna, Tenn., later this year. Managers also are taking steps to speed the assembly line at the car's second plant in Canton, Miss., to boost output 20 percent.
But not all of Nissan's factory moves will translate into more Altima volume. Both plants are highly flexible and are designed to shuffle output from one model to another with minimal effort as the order mix changes.
-Krueger and his U.S. managers are simultaneously integrating new models into the U.S. plant lineup for the coming year. Smyrna will begin building the Leaf EV this December and the high-volume Rogue crossover a year from now. Nissan intends to make 150,000 units of factory capacity available for each of those models.
That gives Nissan a more complicated mission at the same time that it is challenging the Toyota Camry for the No. 1 slot among mid-sized sedans.
"We didn't put all the investment into this product and put in all the features with an expectation to be No. 2," Krueger commented to an audience of reporters at the Smyrna plant last week. "Ultimately the consumer's going to vote with their purchase whether or not we sell more than anyone else."
Mid-sized renewal
| Redesign (model year) | |
| Hyundai Sonata | 2011 |
| Kia Optima | 2011 |
| Toyota Camry | 2012 |
| Volkswagen Passat | 2012 |
| Nissan Altima | 2013 |
| Honda Accord | 2013 |
| Ford Fusion | 2013 |
| Chevrolet Malibu | 2013 |
Source:
autonews.com
