The recent news that the Nissan Titan—despite its poor sales performance—will remain a player in the U.S. marketplace for at least another generation or two probably surprised a lot of people. Of course, just discovering that the Titan is still in production might have been more of a surprise.
The company’s full-size pickup barely crested the 2,000-unit mark in September, and that was with the benefit of the continuing sales swing to the truck side of the business, which brought the Titan an 11.2 percent increase in deliveries last month. For comparison’s sake, the rest of the Titan’s segment performed as follows: RAM pickup, 24,255 sales, +45 percent; Ford F-150, 54,410 sales, +14.7 percent; Chevrolet Silverado, 43,698 sales, +35.8 percent; GMC Sierra, 13,904 sales, +25.5 percent; and Toyota Tundra, 6,695 sales, -3.3 percent. Yes, even as Toyota and the Tundra continue their downward spirals, the latter is still outselling the Titan by about 3 to 1.
So why is Nissan dead set on sticking with its full-size pickup for the foreseeable future?
Truck Wars: Nissan vs. Ford
Let’s start with the fact that, when you breakdown sales of cars and non-cars in this country, the Detroit Three—as expected—owe by far the highest percentage of their sales to trucks and crossovers. The industry product mix through September is surprisingly balanced, with cars representing about 49.7 percent of all sales and non-cars accounting for roughly 50.3 percent. But when you sort the numbers by automaker, only four of them actually were above the industry’s mark—the Detroit Three and Suzuki. A bit more than 74.4 percent of all the Chrysler Group’s sales this year have been non-cars, with the other three going as follows: Suzuki was at 73.1 percent trucks, Ford at 64.4 percent and GM at 59.9 percent.
Then you have to drop all the way to 45.8 percent before you get to No. 5 on the list, and that’s Honda. You have to go all the way down to 13th place before you find Nissan, with 33.6 percent of its YTD sales being made up of non-cars. The only relatively mainstream companies with a lower percentage of trucks in their sales mix are Volkswagen, with a ratio of 85 percent cars to 15 percent trucks—the lowest figure for any of the 18 automakers selling both cars and trucks—and Hyundai, which has relied on the truck side for just 20.2 percent of its YTD sales.
(Kia is still often considered a separate automaker from Hyundai, and the former’s mix was about 57.4 percent cars and 42.6 percent trucks; if you combine sales of the two, the net is a mix of roughly 70 percent cars/30 percent non-cars.)
Yet while Nissan has the lowest mix of trucks of any of the traditional Big Six, and a lower mix than Kia, too, the company’s truck growth rate is worth noting. Cherry-picking our way through the numbers, we find Nissan’s YTD non-car sales have expanded faster than those of Ford, GM, Toyota, Honda and Hyundai. Perhaps more surprisingly, even when you look solely at September, you find that Nissan’s trucks still managed to outgrow Ford’s (although both were surpassed by GM and Hyundai for the month).
Thus, just to be clear, Nissan has grown its truck business at the third highest rate of any of the top eight makers on a year-to-date basis, and remained ahead of Ford, Toyota and Honda in September, when trucks/crossovers/SUVs/etc. were fairly flying off dealer lots.
That’s a lot of balanced truck momentum for an automaker that, remember, hasn’t relied much on truck sales in recent times.
The “Real Truck” Halo Effect
Now, I’ve been conflating trucks and SUVs and crossovers today, but I’m thinking most customers do the same, and that companies selling body-on-frame vehicles not only have a potential advantage in terms of satisfying truck demand because they offer more kinds of non-cars, but also because they provide a certain cachet in those products that isn’t available to brands that focus solely on soft-roaders.
In this way, the body-on-frame vehicles are effectively acting as halo products: A customer who buys, for example, a Chevrolet Traverse, is able to bask in the macho glory of a Chevy Tahoe in a way that doesn’t work with someone who purchases, say, a Honda Pilot. In fact, it may be Ford’s drift away from body-on-frame trucks that is slowing its overall non-car momentum. And I know this is simplifying a bit, because it’s not so much whether a vehicle literally relies on body-on-frame construction for this halo effect; as proven by unibody products like the Jeep Grand Cherokee and Dodge Durango, it’s more about delivering “real truck” performance than actually being a “real truck.” The Pentastar pair still have it, but the new Ford Explorer doesn’t, and the respective truck growth rates at the different automakers likely reflect it.
There is one underlying assumption here that does need to be addressed, however: At some point—i.e., when fuel prices reach about $4 per gallon—the above paradigm collapses and then it is the more efficient crossovers that start to dominate customers’ attention and interest.
Nissan’s Waiting Game
Which is why the most important nugget to glean from the recent Nissan news isn’t so much that a next-gen Titan is expected to be available in 2013, it’s that a redesigned version won’t be on sale for well over a year, or maybe two—giving Nissan that much longer to see if the current truck renaissance will remain a factor in the industry going forward.