A tale of two trucks

In Japan, Mazda Tribute sales lag while Nissan's X-Trail is a hot seller

The rivals
  Nissan X-Trail Mazda Tribute
Wheelbase 103.3 in. 103.1 in.
Length 175.0 in. 173.0 in.
Width 69.5 in. 70.5 in.
Height 65.9 in. 68.9 in.
Weight 3,080 lbs. 3,080-3,366 lbs.
Base engine 2.0-liter I-4 2.0-liter I-4
Horsepower 150 hp @ 6,000 rpm 129 hp @ 5,400 rpm
Fuel economy 28.2 mpg* 21.6 mpg*
Upgrade engine 2.0-liter turbo I-4 3.0-liter V-6
Horsepower 280 hp @ 6,800 rpm 149 hp @ 6,000 rpm
Fuel economy 22.3 mpg* 19.8 mpg*
Price    
2wd $15,415 $14,980
Base 4wd $16,670 $16,650
Top of line $23,540 $21,230
* For 4wd versions. Japan's mileage tests are not comparable to U.S. tests.
Source: Company data

TOKYO - It has been a classic bumper-to-bumper competition between two companies aiming similar vehicles at the same buyer.

When they went on sale here in October, the Nissan X-Trail and Mazda Tribute compact sport-utilities were billed as active-lifestyle vehicles - tough trucks for snowboarders, not soccer moms.

Each company has thrown formidable marketing muscle behind its model.

Nearly a year later, though, the race is no contest. Nissan routinely surpasses its sales goal of 3,000 X-Trails a month, outselling even the formidable Toyota RAV4. Mazda targeted 1,500 Tributes a month but typically sells less than 1,000.

The best sales month for each was in March: 7,076 X-Trails and 1,744 Tributes.

The X-Trail's success and Tribute's tribulations hold implications beyond their sales numbers. Indeed, their differing fates are the direct result of corporate changes at Nissan and Mazda.

For Nissan Motor Co. Ltd., the X-Trail is proof that it has ratcheted up its product-development and marketing skills in Japan, skills it will need to turn its restructuring into a growth strategy. For Mazda Motor Corp., the Tribute's travails are a cautionary tale of the downside of its strategy of developing vehicles with its parent, Ford Motor Co.

"You have to hand it to Nissan's product-development and marketing people. Mazda's got a lot to learn from that," said Howard Smith, auto analyst for ING Baring Securities (Japan) Ltd. in Tokyo.

On a global scale, the Tribute is hardly a flop. In fact, it is a sellout in the United States, where Mazda sold 27,141 through July. That makes it the company's third best-selling model after the Protege and 626, despite tight supplies because of recalls.

"In total, around the world, we have more orders than vehicles. From a numbers standpoint, it's a success," said Mazda President Mark Fields. "From my perspective as the president of the company, it's been a home run for us. But in Japan, I'm not completely happy."

Some analysts say strong sales in the lucrative U.S. market more than compensate for weak sales in Japan.

"Where are you going to make your money? If you are selling 5,000 a month total, they'd probably prefer to sell 4,000 in the United States and 1,000 here, rather than the reverse," said Clive Wiggins, auto analyst for Commerzbank Securities (Japan) Co. in Tokyo.

Ghosn's first product

Although development of the X-Trail began before Carlos Ghosn arrived from Renault to lead Nissan's revival, it was "the first product presentation to top management after I was appointed," Ghosn said.

For the X-Trail, Nissan asked members of the target market what they wanted. They found that 20-somethings wanted an off-roader that would seat four and carry their gear. But when those consumers went shopping, most of the vehicles on the market were expensive, difficult to maneuver and enter and exit, and had poor fuel economy.

Tetsuo Shimizu, chief product specialist for the X-Trail, set his priorities: Room for four and their luggage, with good rear seats, a tough interior, a high-level four-wheel-drive system, and a price of 2 million or less, or about $16,700 at current exchange rates.

The result was a sport-utility with a removable, washable luggage board on the floor of the rear compartment. Instead of the standard split rear seat, the two rear seats are separated by enough space to put snowboards in between. There is no sound system. That keeps the price down and allows buyers to customize their X-Trails with the aftermarket audio system of their choice.

Techno-music launch

The X-Trail's marketing began with its launch location: A techno-music club that few of the audience of over-40 journalists and managers even knew existed. It was one of the first Nissan launches that reinforced the uniqueness of each model.

The X-Trail's TV ads were copied from those of the successful U.S.-market X-Terra: Scenes of surfers and skiers wiping out. Whereas so-called aspirational sport-utilities like to show scenic wilderness shots to assure suburbanites who never go off-road that they could, the X-Trail message was different: This is a vehicle for real sports enthusiasts, who may fail but keep trying.

Nissan also set up "Team X-Trail" to promote the vehicle. It included Japan's top Xtreme sportsters in the fields of mountain biking, snowboarding, free climbing, long-board surfing, body-board surfing and free-style skiing. Each got an X-Trail, with the understanding that he or she would drive it to competitive events and plug the vehicle.

Mazda's fly goes foul

Mazda was equally creative in marketing the Tribute. Its efforts, though, turned into the long fly that resembles a potential home run but that goes foul instead.

Two months before the Tribute's launch, Mazda set up a Tribute link Web site, with tie-ins to hip clothing designers and musicians. The truck appeared in a Japanese movie, Satorare - Tribute to a Sad Genius, featuring the same clothing and music. The media launch was held in the cavernous Budokan, a traditional venue for rock concerts.

Unfortunately, the movie bombed.

In addition, the Tribute lost its momentum because of a series of quality glitches that delayed the sales start. Officially, there was only one recall, but that was because Mazda hadn't put the sport-utility on the road here.

The Japanese press fully covered the Tribute/Escape recalls in America, so when Japanese consumers were reading about the Tribute, it was usually in the context of a U.S. recall.

But the Tribute's problems go back to before it went on sale. It began as the first joint development project between Ford and Mazda after Ford took a controlling 33.4 percent stake in the Japanese carmaker. Mazda officials concede that the project took longer than it would have if Mazda had done it alone.

If Mazda had developed the Tribute by itself, they grouse, the Tribute could have beaten the X-Trail to market.

Still, Fields and other top Mazda executives justify the delay in terms of lessons learned for future projects and lowered costs for both companies.

"Because of the shared nature of its development, the per-unit investment is very attractive," said Mazda CFO Robert Shanks.

But because the U.S. market for sport-utilities is larger than Japan's, the Tribute was designed primarily for U.S. tastes. Hence the larger V-6 engine and cloth upholstery in the rear cargo area.

But those attributes don't necessarily sell in Japan. For example, while Mazda touts the sport-utility's V-6 engine, many Japanese buyers are discouraged by the higher taxes on that size powerplant and its lower

fuel economy.

Both Nissan engines also have large horsepower and fuel-economy advantages over the Mazda engines, a fact not lost on Japanese buyers.

Nissan's base I-4 turns out 21 more horsepower than the Mazda engine with a 6.6 mile fuel-economy advantage, while its upgrade engine, a turbo I-4, generates 131 more horsepower than Mazda's V-6, also with lower fuel consumption.

A Mazda spokesman, though, says the V-6 is not an issue with buyers here. About 45 percent of buyers opt for the V-6, while the other 55 percent take the base I-4 engine, he said.

Smith, the ING Baring analyst, says the "flabby" Tribute shows all of the hallmarks of a vehicle developed for the U.S. market and not for Japan.

"I regard the Tribute as the last of Mazda's flabby old products," he said.

"The new generation of models they've shown will be much better packaged and should be much better launched and marketed, as well. Tribute had all the hallmarks of a product launched for the U.S. market."

Tribute's bad timing

Fields says the Tribute has fallen short of its sales targets because Mazda underestimated the number of quality offerings that came out at the same time as the Tribute, which led to Mazda's ads being swamped by competitors' larger advertising budgets.

A formidable Toyota competitor, the Kruger V, which is sold in the United States as the Highlander, was launched at the same time as the Tribute and the X-Trail, creating enormous ad clutter.

But Fields waved aside the idea that the Tribute's slow sales reflect the risks of jointly developing with Ford vehicles that try to please multiple markets, saying: "We don't have the luxury of coming up with unique products for each market."

You can reach James B. Treece at jtreece@crain.com

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