Low Fuel Prices Drive New Strategies For Nissan and Other Automakers

The big story in the auto industry continues to be low fuel prices that are expected to be sustained well into 2018 and possibly longer. The price at the pump dividend is reflected in consumer choices; notably the runaway sales of Trucks and SUVs. 

Fuel prices also drive corporate strategies like the one Nissan is unfolding in the US market under the “Year of the Truck” banner. Nissan is already the fastest growing mass market car maker with aggressive discounting widely reported to be contributing to that growth.

After introducing an impressive thoroughly redesigned series of the Titan full sized pickup last year, investing tens of millions of dollars into the project with at best a shot at being the number 5th or 6th best selling pickup in America, they are following up with the new full sized Armada SUV which shares some key architecture and technology. Along with a refreshed version of the “large” sized Pathfinder SUV, Nissan is targeting the big truck and SUV segment to achieve multiple objectives.

Nissan’s Objectives

The first, of course, is profitability. With a top of the line edition of the Armada Platinum edition costing about $60,0000, this is a high-margin vehicle that doesn’t need to lead the segment to make money.

The second objective is market share. Nissan continues in the neck and neck race with Honda, coming out ahead as the 2nd largest selling import brand in the US for the first half of this year.

Overall, Nissan is well positioned to push big vehicles to take advantage of the current low fuel cost environment because they have a reputation for a solid fleet of small fuel efficient cars. Nissan’s all-electric LEAF was a strong early entry and is due for a revised edition, while still selling 3rd overall after Tesla, and the Chevy VOLT. They also offer one of the world’s most popular small SUV crossovers: the Nissan Rogue.

Bottom line: if gas prices suddenly spike due to some geopolitical hiccup, Nissan is not left without a seat in this game of automotive musical chairs.

And just yesterday, Nissan doubled down on its big truck and SUV strategy by introducing a new 5 Year/100,000 Mile Bumper-to-Bumper warranty for the 2017 Titan and Titan XD, which makes it the best pick-up truck warranty in the market. Since a large percentage of pickup trucks are work vehicles, this is potentially a game changing proposition in the truck market.