Is Nissan Doubling Down On The Titan?
When you’re dealt the right cards, doubling down is a great way to win big. Nissan looks like a company ready to double down on their investment in the truck segment, but do they have the right hand? Here’s a look at Nissan’s history with the Titan and where they might be headed.
Nissan’s Titan has always struggled to sell. Looking at the sales volumes over the last few years, the Titan started out pretty strong, but has been declining fairly rapidly since 2006. It takes guts to reinvest when your truck is sitting in last place, but that’s what Nissan is preparing to do.
In response to slow sales and criticism that the Titan isn’t offered in enough different configurations, Nissan plans to expand their customer base. Nissan has said they will begin selling an HD Titan in 2014 alongside commercial vans that will be available later this year. These moves could be a great way to improve the return on investment in the Titan and Nissan’s big expensive auto plant in Tenessee, or they might be throwing good money after bad.
It’s hard to believe that Nissan has a lot of confidence in the Titan when only a couple of years ago Nissan exec Carlos Ghosn hinted he would kill the Titan, and Nissan was ready to walk away from truck development completely when they announced the 2011 Titan would essentially be a Dodge Ram (this deal fell through when Chrysler filed bankruptcy).
Which brings us the here and now. Despite terrible sales that show no signs of improving, Nissan has publicly committed to building the Titan and it’s rumored they might build a diesel version of both the heavy duty and light-duty Titan. If this decision to invest in diesel is true, it represents a major investment…but the best move might be to walk away. Here’s why:
- Nissan doesn’t have the loyal base of truck customers that Ford, GM, Chrysler, or even Toyota
- Trucks are getting more expensive to design, develop, and build
- Nissan doesn’t have a good track record when it comes to winning over truck customers
Of course, this is where the gambling reference comes in. New fuel economy rules essentially mean that every truck manufacturer needs to completely re-design their pickup in time for 2016. Nissan’s plan is to release their new and improved Titan in 2014, just as Toyota, GM, Chrysler, and Ford drop new, more fuel-efficient versions of their trucks. If Nissan figures out the best way to build a fuel-efficient truck, they could make big gains.
It should also be noted that the future of the Ram is a little murky. Chrysler is still in trouble, with no new products in the pipeline for next 2 years and poor sales so far in 2010. Chrysler doesn’t have the cash to make major investments in re-designing the Ram, and they can’t afford to discount an older model to keep market share. Ram sales are down 18% so far this year, while almost every other truck is up year-over-year.
If the Ram continues to decline, the Titan and Titan HD have a chance to grab market share. Perhaps that’s what Nissan is gambling on.
What do you think – is Nissan smart to double down, or should they walk away?
Filed Under: Auto News