Nissan will discontinue the Versa Note hatchback in North America in the 2019 model year as consumers shift away from cars to crossovers.
The decision comes as Nissan prepares to introduce the third generation of its Versa sedan — one of the brand's volume staples — this summer.
The hatchback has been a key part of the global Versa program, but the model now has a rival that Nissan believes has greater potential: the Kicks subcompact crossover.
The Kicks uses the same platform as the Note, but has a more popular crossover body style that commands a price premium, said Ed Kim, analyst with AutoPacific.
"So it makes sense for Nissan to drop the low-volume, low-profit model Note in favor of a high-volume, higher-profit model on similar mechanicals," Kim said.
The Note will continue to be built and sold elsewhere in the world.
But Nissan remains confident that it can breathe more life into the sedan market.
The 2020 Nissan Versa will sport a design update, a more powerful engine and standard features typically found in pricier models. Pricing has not been disclosed, but the new generation is expected to start at about $12,700, not including shipping. The 2019 base package it replaces starts at $12,460, before shipping.
Nissan intends to debut the redesigned Versa at the New York auto show this week, and plans to have it in U.S. dealerships this summer.
The update can't come soon enough. The Versa — once the subcompact segment leader — suffered a declining performance in 2018, with sales sliding 29 percent to 75,809 units for the year.
The 2020 Versa is powered by a 1.6-liter, four-cylinder engine that delivers 122 hp.The new Versa is longer, lower and wider than the previous version. The entry-level sedan picks up elements from Nissan's "Emotional Geometry" design language that has been adopted by the higher-end Maxima and Altima sedans. Features such as the V-motion grille, boomerang-shaped headlamps and tail lamps, and a floating roof have been adapted to the new Versa.
The new Versa's interior adopts signature design elements found in the Maxima and Altima, including the "Gliding Wing" instrument panel that stretches across the width of the cabin.
Features reserved for pricier models, including remote keyless entry, push-button start and power windows, will be standard. Heated front seats, automatic climate control, Apple CarPlay and Android Auto will be offered as options. Nissan's advanced Safety Shield 360 technology suite will be standard on Versa SV and SR trims.
But the Versa will maintain its entry-level position for shoppers who just need a basic set of wheels, AutoPacific's Kim said.
"The Versa has always been good at this," the analyst said, "providing class-above interior size — perfect for Uber and Lyft drivers."