DETROIT - On the face of it, this doesn't seem like good timing. A receding economy and an absolutely depressed housing market have pulled down the commercial vehicle market, especially heavy-duty pickup trucks. And on Monday, Nissan announced it will enter the light commercial duty market here as part of a worldwide effort. Good news for Nissan is that by the time it starts building its first U.S. market light commercial trucks in Canton, Mississippi, in 2010, things are almost bound to be better. If they're not by then, Nissan's commercial truck business will be the least of our worries.
The announcement has implications for Nissan's consumer business in the U.S. First, while the company would not talk about future product, a heavy-duty version of the Titan pickup truck would be obvious among the three trucks it plans to sell here early in the next decade. Cummins will supply two Nissan-specific diesel engines for the effort, and Nissan plans to offer a gasoline engine for at least one of the new products as well. And Nissan is working with ZF, which will build a factory here to supply automatic transmissions to the Nissans, on hybrid power development.
Andy Palmer, corporate vice president for light commercial vehicles, allowed that one of the Cummins diesels could, theoretically, power light duty trucks like the Titan (and probably the Armada). Palmer will unveil his first Nissan LCD next January at the North American International Auto Show in Detroit. I'm betting on a heavy duty Titan. All three models planned will be U.S.-designed trucks.
As they enter the market, Nissan's announcement feeds speculation that poor-selling consumer models such as the QX56 will be cut loose in '10. Nissan officials refused to talk about this. Same thing could happen, though, to the Quest minivan. Nissan will spend $1.94 billion initially in the LCD (light commercial duty) business in the U.S., with $118 million to be spent on reconfiguring part of its Canton plant, and expanding it slightly, for the three commercial trucks. Canton currently builds the Nissan Altima, Quest, Armada and Titan King Cab and Crew Cab, and the Infiniti QX56. Palmer said that the QX56 and Quest would be displaced, which means they could be built elsewhere ... or not.
It wouldn't make economic sense to move the QX56 to a different factory from the Armada and Titan. The Quest could be moved, and in fact Nissan showed the Forum concept, a potential replacement, at the Chicago show. I'd say it looks like a good time to invest the money into a new three-row crossover instead, and take the same road as General Motors and Ford. The Titan (65,746 sold in '07), Armada (31,632), QX56 (12,288) and Quest (28,950) all are due for a redesign for the 2010 model year. Of those, only the Titan and Armada are selling in niche numbers for their respective segments. The QX56 and Quest are a sub-niche luxury SUV and minivan.
Nissan plans to attack Classes 3 to 5 in the U.S. with attention to quality, more modern product and clean, efficient engines that meet next-decade Environmental Protection Agency and California Air Resources Board emissions standards. Officials say GM, Ford and Chrysler are in the market with old models, long in need of updating. While it's not talking about volumes or pretty much any other numbers, it plans to open 250 to 300 LCD dealerships initially, all to be awarded to some of its 1,100 Nissan car/truck dealerships in the U.S., mostly in urban markets.