What’s Behind Sluggish 2016 Nissan Titan XD Sales? Dealers, Marketers or the Truck Itself?
Tim Esterdahl | Aug 08, 2016 | Comments 27
After nearly a year and a half since its debut at the 2015 North American International Auto Show in Detroit, Michigan, we are finally seeing the market’s reaction to the “tweener” 2016 Nissan Titan XD with actual sales results. Unfortunately for Nissan, the numbers aren’t great. The 2016 sales results for April, May and June are all below the 2015 numbers of the outgoing truck and the July numbers were up over 2015 by less than 20 units. With a hot truck market and a new and improved product, the natural assumption would be sales should be up and the fact they aren’t brings up many questions. Are dealers hurting the sales numbers by holding out for maximum profit? Is Nissan’s lack of dealers in truck heavy areas hurting them? How about the lengthy and drawn-out product introduction process? Or is it as simple as consumers don’t understand this product and the price doesn’t make any sense? It could just be all of the above.
Early sales results of the new 2016 Nissan Titan XD have been slow. What’s to blame for the slow sales?
Before we get into the reasons why, here are a few items to note:
- Using a very rough estimating method, Nissan seems to have a 4-5 month supply of XDs on the ground as of August 8th, 2016. We’ve taken the number of new Titan XDs listed on Cars.com and divided that by July’s sales figures to come up with this estimate.
- According to a reliable source, used Titan XDs are not drawing any interest at dealer auctions, a sure sign of a soft market. Last week, two 2016 XDs were seen at the Manheim auction in Denver. Neither truck brought anything close to market value.
- Nissan has quietly rolled out $5,500 in incentives on the XD, and some local dealers here in Denver seem to be offering new XDs for invoice (or less).
Dealers Maximize New Vehicle Profits
Leading off with seemingly everyone’s favorite punching bag are dealers. Nissan dealers have been making news lately about not being happy with the company and being the first stop for any consumer, an unhappy dealer is not good for business. What also isn’t good for Nissan’s truck business is the dealers penchant for holding out for maximum profit from new truck launches.
Typically, dealers hold off on incentives or offering savings on new vehicles when they are first launched. This gets worse when the new vehicle is loaded with profit like a truck. Nissan dealers have been watching for years as their competitors have reaped large profits while they pushed an old truck. It is hard to argue with their strategy. If I was a Nissan dealer sitting on a new $60k+ Platinum Reserve Titan, I would be hard pressed to drop the price on it.
As it stands right now, Nissan tells us dealers have ample inventory and the trucks just aren’t moving off the lot. With cash on the hood always being a big factor in whether a truck sales or not and dealers willingness to trade sales for profits, this will change.
2016 Nissan Titan XD’s Price Is A Factor
Speaking of profits, the truck’s price is also a factor. In Houston, Texas you can purchase this 2016 Nissan Titan XD Platinum Reserve for $57k or you can purchase this 2016 Ford F-250 Lariat for $57k. Now features are different between the two trucks, but when you are looking for just a tow rig, like a heavy-duty truck provides, it is hard to opt for the less capable Titan even though the ride quality is better with it versus the F-250.
Then, you have the half-ton discussion. Sure the Titan out hauls most half-tons, but asking consumers to pay heavy-duty money for a slightly more capable half-ton could be asking too much.
Plus, a friend of the site watched two 2016 used Titan XDs run thru the dealer auction last week here in Denver. One was an SV package, and it rolled out at 37,500 (meaning whomever was selling the truck wouldn’t sell it at that price). The other was a platinum reserve that rolled out at $43k (again, the seller wouldn’t let it go at that price).
While prices that vehicles don’t sell at aren’t always indicative of a soft market, this is more evidence that the XD just isn’t selling. Dealers are usually pretty good at figuring out what consumers will buy, and the fact that no one is bidding hard for these used 2016s is a pretty good indication they’re not moving.
If you don’t think price matters, consider this example. The outdated Nissan Frontier just had a banner sales month and it is priced at $5k below other similar trucks and it has a $250 rebate plus special 0 or 0.9 percent financing and a $1000 student/college grad rebate offer. The 2016 Nissan Titan XD diesel has the student/grad rebate, but neither of the others.
Lack of Dealer Creativity
Another factor impacting sales is most certainly dealer creativity in building demonstrations for showcasing the truck. With the 2016 Nissan Titan XD trying to break new ground between the half-ton and 3/4-ton market, dealers are going to have to get creative on how to showcase its ability to a consumer.
The reality is consumers like things they can quickly understand and truck buyers are no different. When a truck buyer is looking for a half-ton or heavy-duty truck, they have a general idea on what it can do. However, you throw a new truck between the two and it is simply hard to understand.
How do you then get consumers to understand? You have to educate them. Nissan’s Director of Product Planning for trucks and SUV Rich Miller told us recently told us of a dealer with a hill behind their store. They had a trailer with 10k pounds on it and they have prospective owners tow it up the hill. This kind of real-world demonstration really helps consumers understand how the truck fits, yet not all dealers have a hill behind their store. Without this kind of real-world or word-of-mouth experiences, the XD is going to be a hard truck to understand.
Car Maker Turns Truck Maker, Dealer’s Locations Need to Change
For years Nissan has been primarily been a company focused on selling cars. They have only had a full-size truck since 2003 and most of their early trucks were two-door, compact trucks that are dwarfed by today’s standards. However, they know the market right now globally is heading away from cars and into trucks and SUVs. As they shift, once again dealers come into discussion.
The dealer discussion here is location with many of them located only in major cities along the coasts and fewer in the truck hot bed areas. For example, according to our research, there are 20 dealers within an hour of Los Angeles, California – a small car and mid-size truck market. While in truck-heavy Houston, Texas there are 14. In comparison, Ford has 8 dealers in the LA area and 18 in Houston, Texas. It is no surprise then that Ford sells a lot more trucks than Nissan.
When you get out to the rural areas, it is even worse. For example, while Wyoming doesn’t have the population like in Texas, they do have a lot of truck buyers in their state and the surrounding areas. In Wyoming, Nissan has 4 dealers and Ford has 18.
The facts are consumers don’t like buying trucks without an idea of where they can get parts. If you don’t have a dealer nearby, they won’t buy your truck.
Is the Product Launch Dragging on Too Long?
My final point is the product launch is exceedingly long on this truck. Typically, a truck is launched in about the same sequence. For example, a truck makes its debut at an auto show, media hype builds throughout the next 6 months with journalists attending drive programs, writing first look articles and then the truck gets launched in the midst of even more reviews being published as well as magazines going to print with stories on them (magazines are typically planned 6-9 months out). Consumers visit news stands or visit websites now read all about the new truck and can go to the dealer to test drive it for themselves.
With the case of the 2016 Nissan Titan XD diesel, it was unveiled in January 2015 and hit the dealer lots early in 2016 with small roll out. Nissan tells us dealers really didn’t get much inventory until just a few months ago. This means much of the momentum from the launch was lost while consumers waited for the product to hit lots.
Now, to be fair, other automakers have done similar things like Ford and their 2017 Raptor. However, that is a halo vehicle and they don’t need to cash in on the early hype.
Nissan, on the other hand, needs all the truck hype it can get. This is especially troubling now that we are still waiting for a half-ton to come out. Many consumers, especially those who don’t follow the market that closely, could simply have walked away by now thinking the XD was Nissan’s only truck offering. Throw in Nissan’s decision to skip the standard numerical naming system (XD versus say calling it a 200, then 150 for half-ton) and one begins to wonder if consumers aren’t as confused as some journalists have been over the naming convention and truck varieties.
At the end of the day, take your pick as to why the 2016 Nissan Titan XD diesel is off to a slow start. Nissan realizes how poorly the truck is selling and is planning an 11-city Titan tour to educate the public and its own sales people according to WardsAuto.com story. While this will be beneficial to everyone involved, we have to wonder about the timing and if Nissan should have followed Ford’s lead with their Built Ford Tough events occurring PRIOR to the truck being put on the market.
The fact is I like the 2016 Nissan Titan XD, however, I said before, the challenge isn’t with the truck rather it is educating consumers and sales people why they need this truck. This process is just going to take time and unfortunately, I’m left to wonder how long Nissan will allow the truck to sit on dealer lots before offering even more massive incentives.
Filed Under: Auto News
I said it when they released the specs.
too big and thirsty for a half ton, too weak and underpowered for a 3/4 ton, but the price structure doesn’t support this position and neither does the efficiency gains.
Just get a 3/4 ton torque monster for the same cost.
the cummins 5.0 weighs 899 dry for starters.
Spec vs. Spec – it is hard to justify the Titan.
Ride quality is where it wins hands down. It is just a tough sell to consumers to understand the difference.
-Tim
Another good article Tim. Product launch slow, dealers are not involving themselves in this new vehicle. 2.5 hours this weekend looking at a gas pro4x and F150. Results are this…Ford at least without driving it showed very good exterior quality control. Nissan XD showed hood not aligned correctly, plastic behind passenger grab handle warped and showing electrical wires underneath. I sent an email to this Nissan dealership and the response was general and not specific to the flaws. Frame, brakes, steering, rear end, and the bed all go to Nissan XD. The Ford frame etc does not come close at least in my opinion to the XD. As a matter of fact to me it felt and showed very thin metal. Forget the numbers it is my opinion that this truck could fit in the 3/4 bracket…but the marketing of a pickup truck in the USA as a (in between truck) is just plain and simple bad marketing. It does not work here. I cannot get my head around the fact that Nissan is actually manufacturing (2) two half tons???? Cummins diesel is a great lead in to the XD but Nissan needs to figure this out……got to hand it to them at least they are trying to get a new model out there. FYI I talked to Curt Hitches and they are trying to get something for the XD in terms of a 5th wheel.
Don,
Thanks for commenting. It is always interesting to hear perspective customers viewpoints when comparing different vehicles. I know what I think, but I’m not the end consumer, you are.
It is going to be interesting to watch how Nissan progresses. Will they alter their approach or will they keep on the same track? There are plenty of smart people over there and I’m sure they will figure it out. Just got some early speed bumps for sure with this strategy.
-Tim
Tim,
Any concrete news on the 2017 tundra plans. Been looking every where for a small leak of info. Other than possible expectations, any idea when they will release credible info? I wish they would add some of the land cruiser options to the tundras as far as offroad technology.
Thanks keep up the good articles.
Mario,
Nothing concrete at the moment. I expect to hear something in the coming weeks, but I don’t suspect there will be any changes besides possibly some trim level adjustments and standard safety features.
-Tim
Hmm, that blows. Oh well. I saw that new 2017 superduty and wow they raised the bar. I was in hopes of expecting a little of that technology for the tundra, well at least that awesome peak around the corner front cam.
Mario,
I was recently in Denver for a Built Ford Tough truck event. The new Super Duty trucks are simply amazing and I really wish Toyota would do something. Ford certainly raises the bar on trucks – for better or for worse.
-Tim
Does that mean I get my double or nothing 6 pack this year too? Lol
Dang it BB! At this point, I’m going to need to send you a CASE of beer!
-Tim
What’s Behind Sluggish 2016 Nissan Titan XD Sales? Dealers, Marketers or the Truck Itself?
It’s the economy, it is not the dealers, marketers, or the truck itself.
If it was 1986 or 2006 these trucks would be out-selling both Ford and GM; specifically in the segment the new trucks are trying to address. With the economy the way it is now there is no market for these trucks like there use to be.
Within 6 to 18 months after the election, the house of cards will first fall for GM and then Ford. It is inevitable and it has all been planned that way.
The union worker’s pensions will again disappear and they again will be left holding the bag.
I think Nissan shouldn’t have marketed it as a XD. They should’ve just called it a regular halfton with XD package. Then they can claim king of halftons. Even though I know the XD is not a halfton or a 3/4ton but if I were to shop for a truck, it would be either halfton or 3/4ton. There just isn’t enough room for tweemers. GM tried this with the 1500HD, it didn’t do well. You have halfton biceps with 3/4 lard, you’re not gonna collect any medals with that. I also think power plays a big role no matter what nay sayer bark about. 555lbtq just seems lethargic in this day and age for a 7k+ truck. I think they should’ve aimed for 650lbtq minimum. That would offset the 3/4ton lard pretty well.
I have to agree with @ricqik
Back when the 1st gen Tundra came out, it was panned as an “almost” ½ ton. We may be seeing a similar phenomenon with the XD.
For my own part, if I had to make a truck buying decision based on a 1000 lb difference in tow capacity, I’d just move up to a ¾ ton. I’m not sure I see the point of a ½+ ton truck.
I’m going with price and competition. Our local Dodge and GM dealers are advertising 12K off MSRP on their top trim trucks. Ford is making similar offers to move the 2016s as the year winds down.
Toyota never budges on the price in my market. They offer low interest rates and call it a sale.
Nissan is the same. They want 50 to 60 thousand for a not quite full size truck. That’s proving to be a tough sale.
I agree. Why buy a dated 3/4 ton truck, in terms of capability, when a new one can be had for the same price? The XD may be more comfortably to drive, but at a 3/4 ton price it’s not a good deal. Now, if it were priced competitively with a 1/2 ton, then things may be different.
Also, marketing. I have yet to see an XD commercial that explains it’s advantage over other trucks. Build and they will come is a risky proposition…
Nissan is happy with 900-1000 units a month with the XD’s. It was never meant to be a volume seller. The regular half tons will be out soon and they will be the volume sellers that they are looking for. Thats why its not fair to compare sales of the XD to the old half ton.
The problem with that is that Nissan themselves said they interviewed truckers and concluded that about 150k owners wanted a truck that has capabilities in between 1/2ton and 3/4ton. Nissan projection plan would be 100k XD and 100k 1/2ton for 200k. It didn’t pan out that way. I think Nissan interpreted wrong. I think owners wanted a powerhouse 1/2ton that is capable of low-end 3/4ton capabilities, not a soften up 3/4ton.
” I think owners wanted a powerhouse 1/2ton that is capable of low-end 3/4ton capabilities, not a soften up 3/4ton”, how are the two that you describe different?
Anyway, been watching the Olympics and saw the same Nissan car commercial many times and nothing on the new Titan. Also, saw the new Honda Ridgeline commercial…
I get the impression there’s a disconnect between marketing and engineering. As we all know Toyota hit the mark with Killer Heat, etc…
Well, maybe I’ll be eating some crow. Nissan just announced an industry leading 5YR/100K bumper to bumper warranty. Sounds like Nissan has a good plan in the works!
A 6000lbs powerhouse 1/2ton with a 8499 GVWR is better than a 7400lbs soften up 3/4ton with a 8900 GVWR.
“Nissan is happy with 900-1000 units a month”
So Nissan is going to start selling 10,000 to 14,000 units of the non-XD? I don’t think so! Nissan is not happy with units sold all around. 140,000 sold per year was the minimum needed just for the investment.
I think the biggest problem is marketing. I live in South Texas, where trucks are king, and I have yet to see a single TV ad for Nissan trucks since the XD was introduced. How can you build up any interest if the general public knows nothing about it?
I delayed buying my 2016 Tundra so I could look into the Titan XD. For me, price was the real factor. I would have liked the Cummins reliability and torque (for towing in the mountains), but the price difference in my area vs. a SR5 TRD was $10k+. At that difference in price, Toyota quality, fit and finish was a no-brainer.
Nissan needs to wake up a realize that they are a marginal truck brand that needs a better value proposition to convert brand-loyal owners.
Nissan dealers evidently thought that truck buyers would pay a premium price for a Titan XD as at several dealerships very little was offered off the price of one. Though I was seriously considering purchasing one I wouldn’t pay a premium price for an XD simply because it was new. If I was going to pay a premium for a truck I’d buy a Tundra, but I would like to buy a Tundra with a diesel engine (whenever Toyota gets around to offering that as an option). I was impressed with the ride of the Titan XD and the features and options available; but I was still aware that it was a NissanTitan so whether it was a new truck or not, I wouldn’t pay a premium for a new truck which has yet to prove itself. With a Toyota Tundra you know what you’re getting while the Titan has been plagued with all types of quality issues and continued to bring up the rear when compared to other trucks in the 1/2 ton category.
The miscalculation was their failure to understand why people buy diesels. The buy it for the additional torque, spelled :tow capacity. Nissan seems to think people will buy a diesel because its a diesel.
This is why I don’t think a diesel in a ½ truck makes any sense. When the chassis becomes the limiting factor, what good is additional torque?
Nearly a year down the road from their introduction, the Titan XD continues to be a very slow seller in my area (south Texas), from what I can see. I work next door to a Nissan dealer, and the lot is filled with XDs that don’t appear to be moving. The half-ton is gradually showing up at dealers, and from I’ve seen on their web sites they are already piling incentives on the new ones to move them. Ditto for the XDs. I’m in the market for a new truck, and the Titan is on my shopping list. My plan is to wait until the first of the year and see what kind of deals they’ll make. It’ll also give me time to watch the reports on quality/reliability, as I’m leery of buying the first year of a new model.
Sales are slow because the Titan XD is just plain ugly. It has lost it’s Nissan identity. Just look at the rack of brochures at a Nissan dealership and ask yourself which one of these vehicles doesn’t belong. The newly designed Frontier looks great, and very Nissan. I think the design team for the Titan XD did a very poor job of reading the marketplace, and a poor job designing the truck. I drive a 2012 Titan, and can not bring myself to purchase such an ugly vehicle, however, the new Frontier may be a contender.