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Nissan Plans Clash of the Titan


Preview: 2004 Ford F-150 by Marty Padgett (1/9/2003)
Preview: 2004 Nissan Titan by Marty Padgett (1/9/2003)
forumIt’s the clash of the Titans. And the F-150s, GMT-800s and Rams. With the launch of its new Titan full-size pickup truck, Nissan is taking aim at the only remaining segment of the U.S. motor vehicle market still overwhelmingly dominated by the Big Three.

The stakes are enormous. Variable profits on a Ford F-150 can top $10,000 for a loaded King Ranch model, analysts say. And that adds up fast when you consider Ford sold 820,000 F-Series pickups last year. In better days, those trucks accounted for as much as half of the troubled automaker’s overall profits. And Ford isn’t unique among the Big Three.

So, considering that American motorists bought 2.3 million full-size pickups last year, you can expect to see a battle royale as the domestic makers defend their turf and Nissan moves to put its proverbial stake in the ground.

Now Nissan

subscribeNissan actually isn’t the first Japanese automaker to enter the large truck market. The pioneer was Toyota . But its original T-100 was an anemic, undersized also-ran. Its second-generation pickup, the Tundra, isn’t much more compelling, according to critics, and apparently consumers as well. It rolled up sales of only 99,333 trucks in the U.S. last year.

Nissan isn’t intending to make the same mistakes, company officials stress. “We intend to bring a truck that can go head-to-head with the segment leaders,” declared Nissan CEO Carlos Ghosn during the preview of the Titan at the North American International Auto Show

2004 Nisan Titan Cargo BedThe truck the automaker unveiled is big and powerful, with plenty of pulling power. It’s got a 300-horsepower, 5.6- liter V-8 capable of towing 9,400 pounds. That’s only 100 pounds behind the top-line Ford F-Series – and perhaps not so coincidentally, Ford just increased its towing capacity from 9,300 pounds, just in time for the Titan launch.

The Titan also features a variety of innovative features, including a two-step, fold-down tailgate, a durable spray-in bed liner, a storage box built into the side of the rear fenders, and the two rear doors that swing open nearly 180 degrees for easy access to the truck’s back seats.

“They will be a credible entry, no question about it,” conceded Jim Padilla, president of Ford’s North American automotive operations.

Ford Fights Back

2004 Ford F-150But Ford isn’t ready to give up any ground, much less concede defeat. The U.S. automaker had its own new offering at the Detroit show, a ground-up redesign of the F-Series. The 2004 model will be bigger and more powerful. Its frame is nine times stiffer than the model it’s replacing.

2004 Ford F-150And in a bold, if risky move, Ford has crafted five different versions of the new F- 150, with distinctly different interiors and exteriors designed to appeal to unique buyer groups. There’s a stripped-down entry-level model, another for hip young outdoor enthusiasts, a high-line version for the “ Texas limousine” crowd, and two others.

But perhaps the most important weapon in the American arsenal is the rock-steady loyalty of the pickup buyer. “We’ve got 26 million loyal owners out there,” noted Padilla, and studies show pickup owners are about the least likely of all to switch allegiance.

Nissan officials agree that will work against them. Simply getting a Ford buyer to consider a Chevrolet is a challenge, never mind selling them a foreign brand. At most, there may be 700,000 full-size pickup owners who’d even consider the Titan, said Larry Dominique, Chief Product Specialist for Titan.

Earning credibility

“We don’t have any credibility in this segment,” Dominique acknowledged. “We have to earn it, and to do that, we have to over-deliver in a lot of areas.”

That’s not only in terms of the product itself. To soften the concerns of those who might prefer to buy American, Nissan has set up an assembly plant in Canton, MS . And the progress of that operation suggests just how cautiously bullish the Japanese maker is about the Titan. The Canton plant underwent two major expansions before it even built its first vehicle.

With Titan still some months away from commercial roll-out, Nissan officials are being vague about hard details – such as how many of the big trucks they believe they can sell. The Canton operation has a capacity of 400,000 vehicles annually, but along with Titan, it will also produce the replacement Quest minivan and two as-yet-unnamed full-size sport-utility vehicles.

Start small, aim high

Most observers expect Nissan to start small, with perhaps 100,000 units a year as its initial target for Titan, “But they could do 250,000 off this platform, and that would make a very healthy profit,” estimated Joe Phillippi, an independent automotive analyst.

Phillippi believes that Nissan’s entry is more than credible, unlike the Toyota Tundra, and “it’s going to set the industry on its ear.”

2003 Toyota Tundra Access CabA critical question is where Nissan’s volume will come from. Ford’s Padilla believes there’s still room to grow the full-size pickup segment, and that’s supported for sales trends. But few believe Nissan will simply tap incremental sales – buyers new to the segment. More likely, it will attract a few new entrants and a lot of conquest sales. And Phillippi echoes common sentiment that it’s not the Big Three, but rather “ Toyota (that) is at the most risk.”

At least for the moment, anyway. But Toyota ’s owner base is small, so if Nissan really does score a hit with the Titan, it could begin to chip away at Big Three dominance in the next few years. It won’t be easy, but history suggests that even with the most credible products, it is impossible to completely lock out the imports.

Will history repeat itself?

Even giving up a relatively small share of the full-size truck market could have serious consequences for Detroit . And the situation is only certain to become more challenging going forward. If history repeats itself, Toyota will be back with a more serious contender in the future. And even Honda has said it may need to reconsider its decision not to enter the big truck market.

The increase in competition and production capacity could lead to more aggressive pricing – and the sort of incentives devastating profitability in other segments of the U.S. motor vehicle market.

Nissan has a long way to go before it can count itself a success. But there’s no question it has set in motion a war for the heart, mind and wallet of the full-size pickup buyer.

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