Nissan retreats on pickup strategy

Nissan has been vowing for two decades to get serious about the American full-size pickup market with a product that challenged Ford, Chevrolet and Ram.

But the Japanese automaker is now taking a step back — a reminder that challenging mighty Detroit's pickups isn't so easy.

Nissan told its U.S. dealers last week that it will discontinue sales of the Cummins diesel engine Titan XD and also jettison certain other Titan configurations, including its single-cab models.

The moves are minor plays within the segment for Nissan. But they are symbolic. Nissan trumpeted the arrival of the Cummins V-8 diesel Titan in late 2015, making it the emblem of the brand's second attempt to shoe-horn its way into the competitive full-size pickup market.

Nissan executives and planners said Nissan's first-generation Titan in 2003 was a low-volume affair because the nameplate lacked key variations for serious truck buyers. Without workhorse street cred, such as a V-8 diesel, they said at the time, Nissan would not be a contender for real pickup cross-shopping.

But Nissan's efforts have gone unrewarded.

The reality is even more stinging in light of the current U.S. market: Pickup sales have been booming, and the Detroit 3 have been maneuvering this year to increase their truck output.

For the first six months of this year, the Titan mustered just a 1.5 percent share of the full-size pickup segment, with sales of 18,026. That was a decline of 23 percent from a year ago.

Nissan's walk-back underscores the powerful hold that Detroit's brands have on the pickup segment. Ford, for instance, sold 448,398 full-size pickups through June.

"Full-size pickup buyers buy American brands," said Sam Fiorani, vice president at AutoForecast Solutions. "This segment is as close to American as apple pie and the bald eagle. This is the Detroit 3's bread-and-butter market, and no Johnny-come-lately is going to tap into it."

Despite the Titan's anemic sales, the Cummins engine has a robust fan base among the pickup's customers. Nearly one of every eight Titans sold last year had the diesel engine, according to an industry source. And about half of all Titan XDs sold last year were diesels.

In a letter last week to Nissan retailers obtained by Automotive News, Nissan Division Vice President Billy Hayes said Nissan remains committed to the full-size pickup market.

"We are simplifying the Titan lineup to focus our efforts on models that maximize opportunities to attract retail customers in the market for a full-size truck," Hayes said. "With a stronger, more focused lineup, we can maximize the impact of the investment we are making."

He told retailers Nissan will unveil "a dramatically refreshed Titan" at the Texas state fair in September and reveal "a new Titan XD" later in the fall.

Tiago Castro, Nissan Division's director of light commercial vehicles, told Automotive News last week the decision to jettison diesel engine and single-cab models is about prioritizing resources.

The light-duty pickup piece of the market is where Nissan sees much of the volume, Castro said. Eliminating the diesel variant will allow Nissan to reinvest in body styles and powertrain configurations geared to that segment.

"It's about focusing investment where we felt we could get the most return and satisfy the customer," Castro said. "We are making a significant investment in the 2020 Nissan Titan. I think our customers will appreciate the coming upgrades."

Despite the product consolidation, Nissan does not intend to surrender the market it serves with the XD.

"It's a competitive market," Castro said. "There's been a lot of investment in the segment. We want to participate well."

In the 2020 model year, "we will have an XD truck," he said.

If Nissan is to compete in the full-size pickup market, it needs to rethink the current XD, which suffers from poor product-market fit, said AutoPacific analyst Ed Kim.

Kim referred to it as a "tweener" product — larger than a half-ton pickup, but not quite a three-quarter-ton.

"The 5-liter diesel engine is not as powerful as true heavy-duty pickup engines, and it isn't as fuel efficient as a half-ton pickup engine," Kim said.

Fiorani was more blunt: "Nissan has a history of trying to straddle two segments and not hitting either one properly."

The XD diesel's inherent selling points have dwindled as half-ton pickups gained powerful diesel engines and three-quarter-ton trucks grew more luxe. Since the Titan diesel arrived, Ford has introduced a diesel into its F-150 and General Motors plans to do so for the Chevrolet Silverado 1500 and GMC Sierra 1500 for the 2020 model year.

With the 2020 model, Nissan could patch some of the shortcomings of the Titan XD, including getter a beefier engine to take on the three-quarter-ton market and more technology and luxury to satisfy the half-ton market.

Truck buyers, more so than crossover consumers, are focused on specs and capabilities, Kim said.

"Right now the unique selling point of Titan is related to the warranty, it's not related to the product," he said. "The product itself is kind of an average truck."

Castro didn't reveal Nissan's plans for the next iteration of the Titan.

"I am not ready to discuss the future," Castro said, but added the XD's capabilities in the 2020 model year will be similar to the XD of 2019.