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Nissan X-Trail

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  • cb70cb70 Posts: 226
    the X-Trail. Liberty is close as it gets and so far that has been proven to be a gas hog. Still waiting to find out how rollover prone it is with that narrow width, high center of gravity.
  • steverstever Viva Las CrucesPosts: 41,297
    ... this isn't a comparison topic either. Anyone have any news or thoughts about the X-Trail?

    Steve
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  • artdechoartdecho Posts: 337
    There are some pix floating around (mag-X.com?) of an Altima-based crossover to compete with the Highlander.....it's V6 and has PT-Cruiser styling cues....while Nissan probably needs a vehicle like this too (they have ZERO cross-overs in our market so far), it would be way more expensive than the X-Trail (more like the Highlander/Pilot)
    and not a true competitor for the CR-V, RAV-4, Forester etc.......the X-trail is available all over the world now........let's get it here!
  • HankrHankr Posts: 100
    Nissan's problem with the X-Trail in the US market may simply be one of manufacturing capacity. To commit this vehicle (or any vehicle) to the US market, they'd need build-capacity for another 60,000 to 100,000, maybe many more vehicles.

    Sure, they can put the X-Trail into Mexico, and that adds another 2,000 units to an existing Japanese X-Trail factory's output. Entering these incremental markets just let Nissan optimize production at full plant capacity. Factor in the X-Trail's popularity in its existing markets, and current build-capacity is probably pretty much maxed-out.

    But commit to the US market, and they'd need some serious dedicated or near-dedicated plant capacity. You're not "just building a few more" when you enter the US. And Nissan doesn't have auto plants just lying around waiting to get turned on. They have to take existing capacity and phase out old programs to implement new ones. (Look at the Honda Odyssey... it's been out 3 years and they still can't build 'em fast enough. It's not that they don't want to, it's that they CAN'T").

    I'm quite certain that Nissan would dearly love to have the X-Trail in the US. And, if honest, they'd probably admit that the X-Terra was the wrong choice (made 5 years ago) to answer the market's emerging love with smaller SUVs. It's now clear these vehicles are just the mid-sized wagons of this generation, and a car-based design is more desirable to the segment than truck-based. But that was not so clear 5 years ago.

    Nissan has committed huge amounts of capital to tooling and vendors to produce X-Terras, and they can't just shut that program down on Friday and pump out X-Trails on Monday.

    This is the reality of the car-building business. It is also a frustration we in the US suffer as consumers, because there are so many interesting cars in the world, but our market is so big, a manufacturer can't just "bring a few thousand in", so we miss out on a lot of variety.

    I was in Lima, Peru recently and waded through car ads in the newspapers. They have more choice of manufacturers, models and designs there than we do here. But that's an incremental market, not a core market, so manufacturers can easily commit their entire model line there without being anything but a footnote for manufacturing.

    That's just the way it is.
  • varmitvarmit Posts: 1,125
    Hankr - Very well said. I have a question, though.

    Why would Nissan start in the fringe markets? It's been obvious for a long time that the Xterra was going to attract the larger market share. The Xtrail hasn't been in production for that long. So why would Nissan introduce it in half a dozen markets? Take all of the regulations, tarrifs, shipping costs, and advertising costs then multiply it by the number of countries. I would think that they could sell the same number of Xtrails here in the USA and only have to deal with one set of these extra costs.
  • HankrHankr Posts: 100
    Well, they really didn't start in fringe markets. They just started in non-US markets like Japan, Australia, New Zealand and (I believe) Europe. Those are not incremental markets. But they are, in total, markets that Nissan felt it could comfortably "feed" with its (finite) X-Trail manufacturing capacity.

    So for the first 6 to 12 months, the plant runs under capacity while manufacturing processes are refined, quality is assured, and the workforce trained. The line starts at say, 60% output the first month and ratchets up to 100% within a year.

    Also during this first year, the model's sales performance becomes established. If it is a runaway hit, you just keep building to try to satisfy the markets you've already entered (Honda Odyssey). If it does "average", there may be a bit more capacity beyond what's needed to serve the markets you've already entered. This is when you go into incremental markets (Mexico or Latin America) to take up some slack capacity. You add small markets incrementally until consumption equals production, and production is at efficient (capacity) levels.

    Nissan also no doubt excluded the US with the X-Trail to avoid cannibalizing the X-Terra... to which it was already committed (these are billion-dollar commitments I'm talking about here).

    Nissan's paying the price (in lower sales volumes) by not having the X-Trail. But when the decision was made, the X-Terra was the only choice. There was no X-Trail in sight, and they could bring the X-Terra to market quickly and cheaply because the Frontier was already engineered and being built right here in the US. Get rid of the bed, add a backseat and a Frontier is an X-Terra. To wait for the X-Trail meant missing 2 years of selling anything into the Small SUV market. (Plus the Frontier is not a great seller, so there was probably extra plant capacity the mechanically-similar X-Terra could take up nicely).

    I just get irritated with some of the whining on these boards that so-and-so-manufacturer is dumb because they don't sell such-and-such. The car business is a complex game where big money commitments are made years before they yield returns. And the plant capacity you have, where those plants are, and what you could build in them (you don't build Focus's on the same line or even in the same plant as Crown Vics) all dictate what a manufacturer can bring to market. It's not quite as easy as "Hey... let's go sell 125,000 X-Trails in the US next year".
  • varmitvarmit Posts: 1,125
    That's a point I often try to make. It takes more than a good car to make money selling a good car.

    One of the things I learned from a manufacturing engineer is the most important aspect to styling a door panel. It might have a beautiful curve, a racy line, or the best dent resistance known to man. But if they can't stack it on top of itself for shipping, it's 100% worthless.

    I still have reservations about some of what you wrote. Nissan also offers the Xterra in Australia and New Zealand. Wouldn't the same conflict be a problem there?
  • HankrHankr Posts: 100
    ....I still have reservations about some of what you wrote. Nissan also offers the Xterra in Australia and New Zealand. Wouldn't the same conflict be a problem there?

    Not necessarily... Its actually a good example of how markets are chosen to optimize the balance between production and sales.

    Say in NZ/Aus they would sell 25,000 X-Trails if that's all they sold. Or 15,000 X-Terras if that's all they sold. Or in that market, selling both, they could sell 18,000 X-Trails and 11,000 X-Terras. (Model cannibalizing is never one-for-one). One of these strategic scenarios may be just the sales-volume mix that "works" to balance sales with production for one or both models.

    So the bean counters (of which a car company has zillions) perform just these sorts of analyses to figure what gets sold where to match output. Factor in other cost variables associated with selling a model in a market like local advertising / marketing, parts distribution, transport costs, local certifications, tariffs, etc etc and the analysis gets quite complex.

    But that's the basic process. Manipulate distribution strategies today to optimize profits on production commitments that were decided-upon some years ago when a model was given a green light.

    ***********
    Ever hear people [non-permissible content removed] about why Ford does not sell the Mondeo here in the US (what used to be the Contour)? No one disputes its a great car, and would sell here. But they're selling like hotcakes in Europe and prior Contour experience in the US indicates we can't support domestic production at acceptable levels. It's a "tweener" where Europe can't build enough to supply us, but we can't economically build few enough here to satisfy this market. When demand in Europe wanes, then perhaps we'll see it here to take up the slack. Same idea.
  • varmitvarmit Posts: 1,125
    Well, I guess we can't really make an issue of it without a bean-counter who knows the markets. I just have a hard time getting over the idea that those extra costs (local advertising/marketing, parts distribution, transport costs, local certifications, tariffs, etc) could be overcome several times in several markets, when it only needs to be done once here in our one big market. I'm sure that Nissan knows more about it than I do... just seems weird. =)

    Great discussion! Thanks for your thoughts.
  • cb70cb70 Posts: 226
    Marketing and sales probably felt the XTERRA would sell better and ran with that. Now they don't want to be proved wrong so Voila! No X-Trail to the US.
  • artdechoartdecho Posts: 337
    While it's true that the decision on whether or not to supply a certain market with a certain vehicle is a complex one, there's no denying that Nissan has totally missed the boat with respect to the compact suv/crossover market. Here it is, 2002, and while some manufacturers are already on their 2nd generation of this type of vehicle or, like Toyota, with their Matrix/Rav-4/Highlander/ RX300, have multiple entries covering every market segement(and those are just their "crossover" entries), Nissan has yet to enter even one vehicle in this ever-expanding, lucrative market.
    The fact that the X-Trail is a very capable and competitive vehicle means that, while there may be some issues/obstacles to be overcome, the decision to bring it here should be a no-brainer.
  • HankrHankr Posts: 100
    My point is that the decision to bring it here must be made 2 or 3 YEARS (or more) before it is done. Do you think they just have 100,000 X-Trails sitting in a garage somewhere while they decide where to ship them? Or can just add 100,000 to next year's production (while cannibalizing X-Terras out of Tennessee)?

    Nissan's X-Terra / X-Trail dilemna was one of timing. They felt it was better to get SOMETHING (the X-Terra) into the $20K SUV segment sooner ('98, '99?) rather than wait until '01 or '02 for the X-Trail to be engineered. And going truck-based (like Jeep) instead of car-based (like CR-V, RAV-4, et al) was dictated by then-available designs (the Frontier existed, the X-Trail didn't) and North American manufacturing capability (They had a Frontier line running in Tennessee).

    And don't forget that in the late 90s, Nissan was financially strapped, to say the least. Sure, Toyota could afford 5 Crossover/SUV programs... Nissan couldn't.

    That it has turned out that the market much prefers car-based vehicles in this segment is just plain unfortunate (for Nissan and us as buyers).

    I'm not trying to defend Nissan's strategies... merely explain them. I too love the Nissan brand and want a vehicle in this segment, and won't consider the X-Terra.

    But Nissan did what they could, when they could; and now they, and we, must live with the results. Commitments were made, and have to be played out.

    It's not always about selling the most cars... it's about making the most (or losing the least) money. All sorts of dynamics play into what we as consumers see (or not) in the showroom.
  • Sorry to irritate you with our want for a what appears to be a great vehicle.
    .

    Only Nissan knows the true numbers. We can only speculate as to capacity, cost of killing the X-Terra vs gain on sales of X-Trail, etc.

    All in all, Nissan has totally missed the boat
  • HankrHankr Posts: 100
    You didn't irritate me at all.

    But understand that if Nissan, who knows "the numbers", would make more or lose less money by having the X-Trail here, they would.

    That they don't have it here and haven't announced plans to bring it here. So by definition that makes the X-Trail in the US a make-less or lose-more proposition for them (for now).

    They won't get your $20K or mine this year, but they've decided they are better off, in the aggregate, without our business.
  • cb70cb70 Posts: 226
    you are spending your money elsewhere. It will show them the error of their ways! :Þ
  • varmitvarmit Posts: 1,125
    You'd also have to take into account what Nissan's profit margin is on these vehicles. They may need to sell 3 X-Trails to earn as much money as they do selling 1 X-Terra. Obviously, I'm making those numbers up, but the X-Terra is not expensive to produce. Being based on an existing platform, using an existing engine, and having production lines in place makes it very cheap. However, they get to charge quite a bit for them.

    Currently, the X-Terra is selling about 4-6K per month. That's not too shabby. It's possible that they'd have to sell as many as 12-16K per month of the X-Trail to make the same profit. For comparison's sake, the Escape, CR-V, and Liberty have never really broken an average of 13-4K. Add yet another popular vehicle to the mix and everybody's piece of the pie gets smaller.
  • artdechoartdecho Posts: 337
    The X-Trail was out in Japan in the fall of 2000.
    Development time on a typical vehicle, on average,
    is what, 36 months give or take? Therefore, plans for the X-Trail must have been formulated in 1997.
    So Nissan has had planty of time to get their act together.
  • There is a role for posts that express interest in different car models. I'd hope manufacturers pay some attention to them. But posts like Hankr's add so much that is new to the discussion that they have unique educational content. Thanks.
  • HankrHankr Posts: 100


    The facts are correct but the conclusion flawed. Say in 1997 Nissan had decided X-Trail instead of X-Terra for the US. What would have happened?

    1998 ZERO SUVs sold in the US in the $20K segment (there is no X-Terra and X-Trail not ready); Tennessee plant sits with idle capacity cuz Frontier not selling so well.

    1999; ZERO SUVs sold in the US in the $20K segment (there is no X-Terra and X-Trail not ready); Tennessee plant sits with idle capacity cuz Frontier not selling so well.

    2000; Some SUVs in the US in the $20K segment as X-Trail production and sales ramp up.

    Catching up with the X-Trail to all those X-Terras NOT sold in '98 thru '00 for would be a big nut to crack for the X-Trail once it came out. How long to "earn it back" with the better X-Trail?? Years. Several years.

    Plus, in '98 thru '00, Nissan was not exactly in a financial position to defer revenues and income to accomodate what may have been a better "long-term" decision. In 1999, analysts were publicly wondering if "long-term" and "Nissan" should be used in the same sentence. Without Renault, they were goners.
  • varmitvarmit Posts: 1,125
    There's no way they could have forecast this, but Nissan would have lost the MT Truck of the Year award and all of the positive press that they received for the X-Terra. That truck did wonders for their public image at a time when they really needed it.
  • Being a bean counter myself, I found these posts terrific! I actually haven't seen such educational posts in any forum in a long time.

    Anyway, I certainly agree with most of what's being said, however, I take exception to the fact that the X-Terra commitment is definitively preventing the X-trail from hitting our shores. The whole point of any company is to have successful products fund the development of new ones. Therefore, shouldn't Nissan start adding capacity at its Ten. plant or elsewhere to start the production of new crossover products? At any rate, the X-Terra is doomed, it's just a matter of time, while crossover SUVs are here to stay, therefore, the longer Nissan waits, the more they stand to lose in the long run. Furthermore, Nissan is starting to make a boatload of cash (actually more than their owners, but that's another story). They're releasing a few hot products here now, they got to be able to fund a new introduction in the US.
  • HankrHankr Posts: 100
    zorglub, you're right. Nissan certainly should be, and probably is, making plans for the X-Trail in the US.

    But for them to say so too far in advance of its release does them no good.

    That's why manufacturers are typically very quiet about new re-designs and replacement models until just before their introduction. They don't want buyers deferring decisions they might make today to maybe-buy something the manufacturer is coming out with in 6 or 12 months.

    Nissan has been very noisy with its Z and Infinity / Skyline derivitive years before introduction... because it won't take-away from current models and builds hype.

    But look how quiet...
    a) Toyota was with recent complete re-designs of Camry and Corrolla.
    b) Honda is with this falls' new Accord, and was with the recent new CR-V.
    c) Subaru is with this spring's Forester (I can't even find a picture, let alone any info).

    Nissan, when it can, will fairly quietly bring in the X-Trail to compete in that segment while minimizing the "hit" to X-Terra as best it can. But I'll bet they announce it one month and it will be in showrooms a month or two later.
  • Hankr, you're completely right. Nissan can't talk about the X-trail until they bring it in for fear of losing/deferring current sales. I hope for their sake, and ours, that they don't wait too long. I don't know too much about the underpinnings of the X-trail but they got to be able to reuse a good chunk of the transmission on other cross-overs. I mean: the Pathfinder has to be next in line for a redesign. That rear live axle has to go and an AWD transmission has to come in (on all models, not just the top one).
  • varmitvarmit Posts: 1,125
    Anybody know what the X-Trail is based on? Is it the old Altima, the new Altima, or a car they don't sell in the states? Or is it another dedicated platform?
  • diploiddiploid Posts: 2,286
    Its engine specs look very similar to the upcoming high performance Sentra.
  • artdechoartdecho Posts: 337
    Don't know what platform they used (or if it was all new) but the engine for Australia/NewZealand is the new Altima's 4......other markets get a 137-140 hp four and a diesel as well.
    Hankr.....not saying that they shouldn't have introduced the X-terra.....as you pointed out, it was something they could get on the market right away to give them some kind of entry level player.
    Just that they've been overly slow to react to the suv/crossover market and to get a credible entry(the X-Trail) to our market.
  • With an Altima engine? Hardly an SUV like the X-Trail, but at least a crossover or mini suv entry... I guess I won't be able to buy Nissan this summer, unless they pull a rabbit (not a VW Rabitt, mind you) out of thier hat. It's a shame. I've been pretty loyal to Nissan over my last 5 cars/trucks. But there's nothing being said that looks like they're even thinking of doing anything but the Xterra or Pathfinder this calendar year.
  • Ford apparently doesn't think the world has enough car-based SUVs. They have announced they are bringing in one from Brazil, a Fiesta-based Fusion, plus they will apparently announce soon that they will build a Taurus-based model called the CrossTrainer.
  • steverstever Viva Las CrucesPosts: 41,297
    Ford CrossTrainer discussion.

    Steve
    Host
    SUVs, Vans and Aftermarket & Accessories Message Boards

    Moderator
    Minivan fan. Feel free to message or email me - stever@edmunds.com.

  • cb70cb70 Posts: 226
    Not a discussion about Fords. As per your response on post 123, stay on topic. Correct?
This discussion has been closed.