LOS ANGELES - Nissan North America could face a hefty price tag to remedy a recall of 96,800 2006 Nissan Altimas and Sentras, which may consume an inordinate amount of oil and cause engine fires.
In a June 16 letter from Brad Bradshaw, Nissan's incoming senior vice president for sales and marketing, the company told dealers that it would pick up vehicles from dealer inventories, transfer them to Nissan facilities for inspection, and return them after inspection and repair.
"We have not made a blanket statement that we will replace all the engines, but we are saying we will make the customer satisfied - whatever it takes," said Nissan spokesman Fred Standish in Nashville. "Fix it, repair it, replace it - whatever is necessary."
Nissan has not pinpointed the problem with the engines or determined how widespread it might be.
The 96,800 Altimas and Sentra SE-Rs are equipped with 2.5-liter, four-cylinder engines. The company said the cars may experience excessive engine oil consumption as a result of improper performance of the piston rings. At least 274 reports of excessive oil consumption and 24 engine fires have been reported to the company.
Nissan ordered dealers to stop selling the vehicles on June 2. It issued the recall on June 13.
Sources estimate it could cost Nissan at least $1,600 to replace one of the engines at a Nissan facility, not counting the cost of transporting the vehicle back and forth.
Approximately 33,500 of the cars are in dealer inventory. But consumers have 57,700 of the cars. Those engines probably will be repaired at dealerships, requiring additional dealer labor charges to Nissan. Nissan has about 5,600 of the cars.
Fixing the cars won't be the only expense for Nissan.
Bradshaw told dealers in the letter that Nissan Motor Acceptance Corp. will suspend all floorplan charges for the unsold Sentras and Altimas. The company will reimburse flooring charges to dealers who are with other financial institutions.
Nissan also has extended the warranty on the cars to 84 months or 100,000 miles, Standish said.
The Altimas were produced at the Smyrna, Tenn., and Canton, Miss., plants between January and May. The Sentras were manufactured at Nissan's plant in Aguascalientes, Mexico, between February and May.
You may e-mail Kathy Jackson at [email protected]
Staff Reporter Lindsay Chappell contributed to this report