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Friday, November 14, 2003

Titan truck undercuts rivals

Nissan full-size pickup starts at $22,400; automaker seeks to avoid discounting

By Christine Tierney / The Detroit News

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Flush with confidence after a remarkable comeback, Nissan Motor Co. is gunning for a piece of the lucrative U.S. pickup market -- the last preserve of the Big Three -- with a full-sized truck priced more than $2,500 below the competition.

Introductory prices on Nissan's brawny Titan, which hits showrooms early next month, will start at $22,400 for the King Cab model and $25,100 for four-door Crew Cab versions with fold-flat back seats, Nissan said Thursday.

Set against comparable models built by Detroit's automakers, Nissan's stubby-nosed $24,400 Titan King Cab SE version with extra trim costs $2,620 less than Ford Motor Co.'s similarly-equipped F-150 Super Cab, $2,955 less than the popular Dodge Ram and $2,770 less than General Motors Corp.'s Chevy Silverado.

As the Japanese automaker barges into a segment known for fiercely brand-loyal customers, "these prices give us a competitive advantage," said Jed Connelly, senior vice president for sales and marketing at Nissan in North America.

"If they're going to stay loyal, we want to make their choice difficult," he said.

And Nissan wants to price the trucks closer to final transaction prices to avoid discounting the vehicles and diminishing resale value.

In the past three years, sales incentives in the large pickup truck segment have increased by $2,500 on average, to more than $3,300.


Price war

How Nissan Titan's price matches up with comparable, popularly equipped rivals:

Nissan Titan King Cab SE Ford-F150 Super Cab XLT Dodge Ram Quad Cab SLT Chevy Silverado Ext. cab LS Z71
5.6 liter V-8 5.4-liter V-8 5.7-liter V-8 5.3-liter V-8
4x2 $26,500 $29,555 $30,055 $30,466
4x4 $30,300 $33,290 $34,580 $34,360
Current average transaction price for large pickup trucks:
Toyota Tundra '04 Ford F-150 Dodge Ram Chevy Silverado
All models $25,153 $30,850 $25,114 $23,817

Note: Chevy, Dodge and Toyota prices include all recent model years
Sources: Nissan, Power Information Network


Now the world's most profitable mass-market automaker after a spectacular turnaround under CEO Carlos Ghosn, Nissan is leading the Japanese charge to challenge Detroit automakers with full-sized trucks after introducing a new generation of minivans and sport-utility vehicles.

Pickup trucks represent a huge source of earnings for Detroit's automakers, which can generate up to $10,000 in profit per vehicle.

Toyota Motor Co. ventured cautiously into the market, first with the lackluster T100 pickup in the early 1990s, and now with the Tundra, whose dimensions still fall short of the full-size market's demands.

Learning from Toyota's missteps, Nissan has equipped the Titan with a standard 5.6-liter V-8 engine that delivers 305 horsepower and 379 pound feet of torque, enough to haul a 9,500-pound load.

Its catchy amenities include a built-in toolbox and scratch-resistant bed liner. The interior offers sophisticated features such as a DVD-based navigation system.

"The Titan may cannibalize the Toyota Tundra ... but it means more competition in the pickup truck segment and that is probably worse for GM, Ford and Chrysler than it is for Toyota," said David Healy, an analyst with Burnham Securities.

Nissan wants to sell about 100,000 Titans a year -- a fraction of the combined sales of Big Three trucks. It will deliver the first trucks to 17 key pickup markets, including Dallas, Phoenix and Atlanta, to get early feedback.

The automaker, which is building the Titan at an ultra-efficient $1.4 billion factory in Canton, Miss., can alter the trim, color scheme, production mix and options based on customers' initial responses, Connelly said.

If Nissan hits sales targets, it will still only grab 5 percent of the big pickup market, which reached 2.2 million units in 2002.

But the Titan's platform, or underpinnings, is also the base for the new Nissan Pathfinder Armada sport-utility vehicle and Infiniti's big QX 56 SUV, which goes into production in January.

After investing heavily in the U.S. market, the biggest source of profits for Nissan, the automaker has more than doubled the range of models on sale in the United States since 1998.

You can reach Christine Tierney at (313) 222-1463 or [email protected].

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