Finally, No Excuses at Nissan

Automotive Industries, July, 2001 by Ken Gross

Nissan must use the Internet, targeted direct marketing and test drives to pitch the new Altima.

Struggling to compete with powerhouses Toyota and Honda through the 1990s, Nissan often took the safe route with "me too" products. That cautious copycat strategy yielded a modest share -- Nissan discounted, it stayed in business, but instead of a big slice of the pie, it got the crumbs. Most Nissans were compromised, out of sync with the big guys. Altima was the best example: budget constrained, salable in Japan and Europe, but too small a vehicle for the U.S. against mega-selling Camry and Accord.

Consequently, Altima was never in the hunt So Nissan adopted the "three-sedan strategy" marketing slogan that was really an excuse for not having the right product. At the top was Maxima, which sold a consistent 100,000-plus units for years but was too sporty to be a mainstreamer. In the middle was Altima, a 120,000-to 140,000-unit seller. And on the lower rung was the smaller Sentra. This trio wasn't enough to even dent the giants.

Now, newly-profitable Nissan has budgets to do new entries right the first time. Alter its research discovered 16 percent of four million annual mid-sized sedan buyers were dissatisfied with the design and performance of available offerings, Nissan targeted that group. It's going after the big guys directly with what Jack Collins, VP of marketing, calls "no excuse" products.

The result is a sedan intended only for the U.S. and Canada that hits Camry and Accord right between the headlamps. The impressive new Altima packs power (240-hp V-6 or 180-hp I-4), size (three inches longer overall, with a five-inch longer wheelbase and 6.3 cubic feet more interior space than Camry) and style -- its body exterior resembles something from Audi, or perhaps a smaller Q45. Interestingly, the front seats are positioned 1.5-inches higher than its predecessor's; Nissan engineers believe drivers returning to sedans from SUVs will subtly appreciate the enhanced visibility and familiar position.

"We took it (Altima) further than people expected," Collins says, hoping, of course, that the soon-to-come 2002 Camry hasn't grown proportionately. Collins' crew studied Camry improvements overtime, aimed ahead of the target and built a beauty.

The big investment in a new Altima platform gives Nissan a chassis for a sedan-based SUV, a station wagon, the next generation Maxima, maybe even a sports coupe. Meanwhile, Maxima, buffed and freshened, gets 260 hp and a 6-speed gearbox to tide it over. With Maxima GXEs selling slowly, Nissan positioned the topend Altima 3.5 SE to take up the unit slack. Collins predicts they'll sell fewer Maximas, but they'll move 190,000 Altimas (and have capacity to move more) in four trim levels. And with the larger Altima, the next Maxima can now move upmarket to be an affordable BMW chaser. So the new Altima with its proper size and power finally dissolves the "three-sedan" excuse.

And thanks to the Xterra SUV, Nissan's newest customers are younger, more affluent and hipper. Sentra buyers are young too. So there's an opportunity here to move existing customers up. Nissan's planning a major network TV launch for Altima to gain awareness and tell buyers there's a clear alternative to Camry and Accord. That's fine, but it must also use the Internet and targeted direct marketing. If it gets buyers to drive new Altimas, especially against competitors, it will convert a lot of sales.

Walter Chrysler once made history with his "Look at All Three" ad campaign which urged buyers to compare Plymouth with Ford and Chevrolet. When the radically-styled 1993 Ram pickup first appeared, Dodge told its dealers to have competitive pickups on hand to hammer the point home that its new trucks were truly different. It takes guts to go head-to-head with entrenched rivals, but the new Altima is up to the task.

If Toyota and Honda aren't looking over their shoulders, they should be.

KEN GROSS is an internationally known author and marketing consultant. He has been writing about automobiles and the auto industry for nearly 30 years.