2013 Nissan Altima production begins in Smyrna, Tenn.
The fifth generation Altima began U.S. production on Tuesday, May 15 and goes on sale in U.S. dealerships this summer. It has a shot at becoming the most popular sedan in the U.S., having already passed Honda’s Accord in sales. Now the company hopes it will out-sell Toyota’s No. 1 Camry within a year.
Nissan, long renowned for excellent engineering, is working hard to overcome a legacy of uninspired marketing that hasn’t made much of a dent in Toyota’s and Honda’s sales. Nissan long made well-regarded vehicles that had difficulty reaching the front ranks of consumer awareness.
Not that Nissan hasn’t sold a lot of Altimas. The first generation rolled off the line in 1992 and, according to the company, Nissan has sold some 4.4 million units since. “[But the] Altima has relied heavily on sales to fleets, rather than retail,” says Michelle Krebs, an analyst for Edmunds.com, an automotive website. That made gaining a reputation with retail customers difficult. “It’s been hard for companies like Nissan and Mazda to break through” the marketing presence of Honda and Toyota, she adds.
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Tennessee Gov. Bill Haslam, who spoke at Nissan’s Smyrna, Tennessee assembly plant on Tuesday said “if I worked at a certain place in Georgetown, Kentucky I would be nervous about holding on to the No. 1 title.” Haslam, who was invited to help inaugurate production of the new vehicle, was referring to the site of the Toyota plant where the Camry is assembled.
In the first four months of 2012, Nissan sold 112,599 Altimas, almost 30% more than the same period last year. By comparison, Honda sold 96,517 Accords, Toyota sold 142,225 Camrys, Chevrolet sold 80,456 Malibus and Ford sold 85,559 Fusions during the same period.
Bill Krueger, vice chairman of Nissan operations in the Americas, credited improvement in Nissan’s worldwide manufacturing system following the crisis of 1999. At that time French automaker Renault bought a stake and reorganized the company. The system allows Nissan to optimize production at its assembly plants, which are flexible enough to build five or six different models, while keeping quality high and spreading best practices to all its plants. “The building blocks were always there,” says Krueger. “It took the crisis to elevate the system.” What about the Altima’s chances of passing the Camry? “We didn’t make all these improvements to be No. 2,” he says.
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That may be easier said than done. The competition is fierce, not just from Toyota but from a resurgent domestic auto industry as well. Consumer Reports rated the 2012 Camry its top family sedan, a title won by the Altima in 2010 and 2011.
More worrisome, Nissan’s dependence on fleet sales doesn’t seem to have ebbed. Volume sales to rental and other fleets at discount prices hurts residual values. Truecar.com reported that, last year, about 26% of Altimas went to fleets, versus less than 1% for Honda Accords and 14.3% ofToyota Camries. So far this year, the year-end closeout of last year’s Altima has been selling at an average transaction price of about $23,500, a 10% discount from the retail price, according to Truecar.
Still, Nissan is pegging its hopes to a shiny new model. The 2013 version, which starts at $21,500, keeps the same basic architecture as the car it replaces but has otherwise been thoroughly redesigned, including new high-tech gizmos such as lane departure warning, blind-spot warning and NASA-inspired seats. Given recent high gasoline prices, Nissan is emphasizing the highway mileage number for its 2.5-liter four cylinder version, 38 miles per gallon.
That leaves Nissan pulling out all the stops to make the model a success, including running three daily assembly shifts at U.S. plants building the car.
