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Other Makes And Modelsdiscussion of all other makes and models
Automaker to broaden product lineup, take advantage of rising gas prices
FARMINGTON HILLS, Mich. - Nissan Motor Co. Ltd. will sell a subcompact car in the United States starting next summer in an effort to broaden its product lineup, draw more consumers into the brand and take advantage of the growing sensitivity to rising gasoline prices.
A hatchback version of the Versa, which will range in price from $12,000 to $15,000, will go on sale next summer as a 2007 model and a sedan version will be available late in the year, Nissan executive said. Production in Mexico will start in May.
"There's room for a new entry-level Nissan," Jed Connelly, Nissan North America senior vice president of sales and marketing, told reporters at the Japanese automaker's technical center outside Detroit.
The Versa will compete against such vehicles as General Motors Corp.'s hot-selling Chevrolet Aveo, as well as cars from South Korean automaker Hyundai Motor Co. Ltd. and its Kia unit. It will slot under Nissan's current entry-level car, the Sentra, which will move upmarket slightly with more room and features, Nissan said.
In addition to the Versa's introduction next year, Japan's Toyota Motor Corp. will begin selling its Yaris minicar and Honda Motor Co. Ltd. will offer a version of its Fit small car in the United States as automakers rush to serve a small but growing segment of the market.
Sales in the entry compact segment so far this year through August were up almost 3 percent to almost 100,000, with Aveo boasting a 48 percent sales jump, according to J.D. Power and Associates.
Nissan, which last September announced its decision to enter the subcompact segment, said the under $20,000 segment, which will be served by Versa and Sentra, currently totals almost 1.9 million cars a year in the United States. "Frankly, we want a bigger piece of it," Connelly said.
Nissan dealers are excited to have another product to entice customers. The automaker posted a 15.4 percent increase in U.S. sales this year through August,
"It's definitely a product that Nissan dealers need, especially in the Northeast and major markets," said Paul Miller, owner of Paul Miller Nissan in Fairfield, Connecticut. He said consumer demand is there as his sales of used Sentras are up 80 percent over the last six months.
Nissan's Versa, whose name is a play on the word "versatility," will be built at the company's Aguascalientes plant in Mexico, which currently builds the Sentra.
While officials did not reveal sales targets for the new car, they said the automaker is investing $800 million to expand the plant's annual capacity by 150,000 units to 350,000 in 2007. Suppliers are spending another $500 million.
The investment will mean the addition of 2,000 jobs at the plant, plus another 2,000 jobs at local suppliers, Connelly said.
The car is a North American version of Nissan's Tiida, which is built in Japan and China and is now one of the top 10 selling vehicles in Japan. It will be sold under the Versa name in the United States and Canada.
The Versa is based on the B platform, the same underpinnings used to build the Renault Clio and Scenic as well as the Nissan March, Micra and Cube cars. France's Renault controls Nissan.
Connelly said that platform sharing will allow the vehicle to be profitable at its low price point. Its buyers will likely be younger and pull heavily from the population of used-car buyers who couldn't afford a new car before, helping to build brand loyalty at Nissan as consumers buy larger vehicles.
The Versa will offer a projected 38 miles per gallon, a plus as consumers look for more fuel efficient vehicles.
The average retail price of gas on Wednesday was $2.81 a gallon, about 8 percent higher than a month ago and almost 50 percent more than last year, according to American Automobile Association. Prices peaked at $3.06 on Sept. 5 after Hurricane Katrina ravaged the U.S. Gulf Coast.
$12-15k for a brand new car.... I can only assume the quality of it. heh