DETROIT - Nissan Motor Co. Ltd. is cutting short the product lives of three bread-and-butter vehicles in a rush to get better replacements to market. At the heart of the fury is the recognition that Nissan's current U.S. lineup is laced with underperformers that do not reflect the full potential of Nissan designers and engineers.
On the block for accelerated redesigns are the Altima and Maxima sedans and Frontier pickup, which together represent about half of Nissan Division's U.S. sales. Accelerating the product cycles is part of Nissan's global strategy to slash its platform count from 22 today to 10 by 2003.
The first to be changed will be the Altima. The car was redesigned in 1998 and will be replaced in fall 2001 by a larger sedan, bigger than the existing Honda Accord and Toyota Camry, said Yuki Kitahora, Nissan North America senior vice president.
'We have a very short temper,' Kitahora said in an interview last week. 'We have to catch up and do better than Toyota and Honda.'
The next Altima will offer consumers a choice of a four-cylinder or six-cylinder engine. That move would end Nissan's core U.S. strategy of offering 'tweeners' that fit between major competitors. The Altima, which now comes only with a four-cylinder engine, has been seen as fitting between the Honda Civic and Accord, and not really competing against either.
BIGGER MAXIMA ENGINE
Executives said displacement of the four-cylinder will increase from its current 2.4 liters, while a V-6 could exceed 3.0 liters. Nissan wants customers to think of its vehicles as having more horsepower than the competition, even if that means those vehicles cost a little more, said Jack Collins, Nissan North America director of product strategy.
Nissan has always had strong powertrains but has gotten away from putting them in their cars, Collins said. 'Now we have a better understanding and recognition of the Nissan heritage and what we're good at,' he said.
At the same time the Altima changes, the Maxima will get an engine bump to 3.5 liters. But even that will be short-lived, as the Maxima is slated to be placed on the Altima platform as soon as fall 2002 - even though it was redesigned just last fall.
Collins said Nissan can afford a short cycle for the Maxima because it is selling well above its annualized break-even point of 96,000 units. It also helps that the current platform was not changed much in its redesign, which makes for a quicker amortization schedule.
In fact, the major factor slowing Maxima development is the question of what to do with it, Collins said. With the next Altima growing almost as large as the current Maxima, and with the two vehicles sharing the same platform next time around, there are heated discussions as to what role the Maxima will play.
The most common belief is that the Maxima will grow to the size of a Toyota Avalon. But, Collins noted: 'We're still going to be aiming at the sporty, performance-oriented buyer. If Maxima becomes a Buick, it's not a Maxima. It would be inappropriate.'
Meanwhile, the Frontier truck line also will be replaced ahead of schedule. Although it has spawned the successful Xterra and Crew Cab variants, the Frontier platform has been derided for its dated technology, crude ride and uninspiring performance.
The first Frontier rolled off the assembly line in late 1997. Most trucks carry a seven-year cycle; Nissan wants to cut the Frontier's to five years.
'Frontier is already too old,' Kitahora said. While Nissan waits a couple of years for the Frontier replacement, it will have to make do with sheet metal changes coming this fall.
Nissan also is developing a V-8-powered full-sized pickup and sport-utility, which should arrive by 2003.
Funding for all this development is coming from cost-cutting measures, Nissan's divestiture in affiliated companies and savings in the supplier chain. Currently, r&d investment is just 3.7 percent of sales revenue, a mark Nissan wants to raise to 5.0 percent. And North America will get the lion's share of that funding, promised Nissan COO Carlos Ghosn.
In a meeting with reporters, he said, 'Why would we want to have 4 percent of Fuji Heavy Industries when we have no impact, and yet we're cutting back on product investment at the same time? That means we have nonmarket-specific products and longer cycles, which is a bloodbath.'