Nissan's hybrid problem goes Rogue

Nissan Motor Co. is now the only major automaker with no mild or plug-in hybrid vehicles in the U.S., and the automaker is paying the price with a slump for its top-selling nameplate, the Rogue compact crossover.

Last year, the Rogue accounted for one-third of the brand's U.S. sales and half of the production at Nissan's plant in Smyrna, Tenn.

Rogue sales have "dropped off the cliff" as demand for hybrid competitors soars, said a retailer, one of five interviewed who requested not to be identified. "We used to sell 30 to 40 Rogues a month, and now we are down to 15 to 20," the retailer said.

Rogue volume fell 29 percent in the second quarter to 50,356, despite an updated model introduced early this year. First-half sales slid 4.5 percent.

In April through June, Toyota delivered about five RAV4s for every two Rogues sold by Nissan, with the hybrid versions alone outselling the Rogue by 25 percent. While Honda does not break out model line sales by fuel type, Edmunds estimated that the CR-V hybrid nearly matched the Rogue in the second quarter.

Nissan spokesperson Kyle Bazemore said the Rogue's midcycle update and the arrival of the rugged Rock Creek edition late this summer will help widen the crossover's appeal.

"We've added features like ProPilot Assist 2.1 and Safety Shield 360," he said, "allowing Rogue to have what it takes to compete in the largest segment in the U.S. market."

Registrations of hybrid vehicles and PHEVs rose a combined 48 percent in the first quarter to 412,926, according to S&P Global Mobility.

Hybrid compact crossovers sat on dealership lots in the second quarter for nearly half as long — 25 days — as their internal combustion engine-only counterparts, which took 48 days to turn, according to Edmunds.

Worse for Nissan, 15 percent of Rogue owners who went with a different brand traded in for a hybrid, Edmunds data showed.

Ivan Drury, insights director for Edmunds, said the Rogue is in a "precarious position, with one in five compact crossovers sold being a hybrid."

"Rogue won't be taken as a serious contender by compact crossover shoppers as long as it remains ICE-only," Drury said. "Even as Rogue buyers save thousands of dollars up front, they'll get weekly reminders at the pump as to why the competition has hybrid offerings."

Nissan executives recognize the predicament.

"Many manufacturers [of small crossovers] are getting traffic because they have a hybrid and we won't have that for a while," Nissan Division U.S. sales chief Judy Wheeler told Automotive News in July.

Wheeler said the automaker is "working on something" but declined to elaborate on Nissan's hybrid plans. "It will be in the right vehicle, in the right segments," she said.

In the next three years, Nissan will bring its e-Power system to the U.S., likely in the next-generation Rogue that's expected in 2027. Nissan also will introduce a PHEV offering based on the powertrain in the Mitsubishi Outlander PHEV.

Meanwhile, retailers are frustrated they aren't hearing a near-term strategy to meet the hybrid moment.

"We don't have the vehicles and options coming quickly enough to meet customer demand," one dealer said. "Nissan just doesn't seem to get that the market has drastically shrunk for 100 percent gas vehicles unless they're cheap enough."

Another dealer said Nissan's miss on hybrids puts several of its key nameplates, including the Rogue, Altima and Murano, at risk from hybrid competitors. "Nissan needs to buy hybrid technology from another automaker and bring it to market as soon as possible," the dealer said.

Retailers say lowering the crossover's sticker price to offset the fuel economy savings afforded by hybrid competitors is essential. Discounts on the Rogue ballooned 85 percent in the second quarter, according to Motor Intelligence, to an average of $3,984 per vehicle.

"We need to be able to tell the customer we can save them 'x' dollars up front that it would take four to five years to recoup in lower gas costs driving a hybrid," one retailer said. "That gives us a fighting chance."