Nissan dealers want Xterra back - Automotive News

culamoto.blogspot.com

Stoked by the market frenzy now greeting the return of long-dormant SUVs such as the Ford Bronco and Land Rover Defender, some wishful Nissan dealers are calling for the return of their own long-absent model — the funky Xterra SUV.

And according to dealers, the automaker is now listening.

The pickup-based sport-ute, once referred to as "the car that saved Nissan" for bringing an infusion of sales to the then-struggling brand in 1999, was discontinued after the 2015 model year, a casualty of new safety regulations and a consumer pivot from truck-based utility vehicles to lighter unibody crossovers.

Nissan veered away from the midsize sport-utility market.

But the mood is changing after the segment grew 61 percent in the past decade.

Given the sales success of the Jeep Wrangler and Toyota 4Runner, Nissan is leaving money on the table, said Tyler Slade, operating partner at Tim Dahle Nissan Southtowne in suburban Salt Lake City.

"The rugged body-on-frame utility segment is on fire, and we're missing out on key business for the brand," Slade said.

Nissan National Dealer Advisory Board Chairman Scott Smith would like to see the automaker cash in on the current renaissance of iconic models, such as the Bronco and the Defender.

"Other than the Z car in 1970, the Xterra was the best launch we've ever had," Smith, president of Smith Automotive Group near Atlanta, told Automotive News. "It would be great if Nissan would recognize that the Xterra should come back."

The dealer board conveyed that enthusiasm to Nissan Motor Co. COO Ashwani Gupta at a meeting this month. Gupta, Nissan's No. 2 executive globally, was noncommittal about returning the Xterra to the U.S.

"We've talked about the Xterra, but nothing's been decided," Gupta told the dealers.

Gupta is keenly familiar with Nissan's global truck capabilities. Before becoming the automaker's COO, he oversaw global commercial vehicle strategy for the Renault-Nissan alliance. In that role, he led the development of what looks to the casual observer somewhat like the Xterra — a similar midsize body-on-frame SUV that launched in China and Southeast Asia in 2018. Its name? The Nissan Terra.

A Nissan spokesman said, "We always consider other new models based on market opportunity, but we are focused on [the] core segments at this time."

The U.S.-birthed Xterra was introduced in 1999 as a low-investment project to help retailers as Nissan Motor narrowly avoided bankruptcy. Outfitted with oversize roof racks and a washable cargo area, the SUV grabbed the attention of outdoorsy young buyers — the holy grail of every automaker.

The Xterra's quirky theater-style raised rear seating, which made it stand out, was a consequence of necessity, recalled Larry Dominique, CEO of PSA North America, who was a leader of the Xterra's development in his previous career in Nissan's U.S. product planning office.

"We developed the Xterra on a shoestring budget — about $40 million — because we anticipated we'd sell about 40,000 units," Dominique said.

To keep development costs down, the SUV was built on the existing short-wheelbase Frontier pickup chassis. But the Frontier's rear axle and leaf spring design meant engineers had to lift the Xterra's rear seat by 75 millimeters. As a consequence, the roof had to be raised by an equivalent amount, giving the Xterra its unique rear bump.

"The reason the Xterra became somewhat iconic in the way it looked was the side effect of us having no money," Dominique said.

But the Xterra proved to be a surprise hit, wildly beating Nissan's initial sales projections and peaking at 88,578 in 2000. It continued to be a good volume product for retailers for years.

Slade believes an updated Xterra could notch 70,000 to 80,000 sales annually, given the renewed enthusiasm for retro off-roaders. He points to the Bronco, which has secured about 190,000 reservations since Ford announced it would bring back the SUV after a quarter century. Ford officials told dealers early last year they expected sales of the Bronco model line to top 200,000 in 2021.

"The Bronco suddenly looks like a new Tesla model," Slade said. "Everybody wants to put a deposit down."

Dealers believe a revived Xterra would bring two things the Nissan brand is short on: buzz and profits. Like the GT-R sports car, the Xterra would be a brand-builder — generating consumer attention that Nissan could monetize across the product portfolio.

"The Xterra brought people to our showrooms we hadn't seen before, and it drove sales across model lines," Smith said. "We've still got people coming in and asking for it."

With light trucks approaching 80 percent of the market, the notion of the halo vehicle is shifting from sports cars to high-performance trucks and rock crawlers.

"At a time many automakers might be combing through corporate archives for off-road vehicles from long ago, Nissan finds credibility almost right in front of it with the Xterra," said Tyson Jominy, vice president of data and analytics at J.D. Power.

Dominique said the Xterra played in a unique segment and could deliver incremental volume.

"Customers in this segment are looking for capability," he said.

Cashing in on nostalgia can be lucrative for brands. "Profitability in the off-road SUV segment is up there next to trucks," Slade said. "The margin on a Wrangler is double that of a [Nissan] Rogue."

Dealer wishes aside, reviving the Xterra would be a challenge for financially hamstrung Nissan. The Japanese brand is struggling to revive its U.S. business, which slid 33 percent last year — the largest percentage decline in its history. Meanwhile, Nissan is in the middle of a two-year product reboot that involves updating 70 percent of the portfolio, including a Frontier redesign.

Nissan officials in Japan have dismissed the idea of bringing the Chinese Terra to the U.S. as a successor to the Xterra.

"Currently, that is out of our scope," Hironori Awano, chief vehicle engineer of the Terra, said in 2018. "The U.S. market is one of the toughest, not just because of crash tests but also because of customer expectations."

There also is the issue of how many off-road-capable models the U.S. market can support.

Sam Fiorani, vice president at AutoForecast Solutions, noted: "Jeep proved that the market is deep. Ford is looking to expand it."

But he wondered, "Is there really a market for a third 'affordable' off-roader?"