Nissan, Honda Scale Back Production of Pickup Trucks for U.S.

Nov. 5, 2005; Alan Ohnsman writing for Bloomberg reported that Nissan Motor Co. and Honda Motor Co., Japan's No. 2 and No. 3 automakers, are scaling back North American production of their newest pickup trucks after falling short of sales goals.

Nissan last month built 7,991 Titan pickups at its Canton, Mississippi, plant, 11 percent fewer than in September and 14 below August's production rate. Honda last week said it will make 3,000 fewer Ridgeline pickups than planned at its Alliston, Ontario, factory in the first quarter of 2006.

``In Honda's case, it's probably a combination of a quirky design and a price that's a bit too high,'' said George Peterson, president of AutoPacific Inc., an industry consultant in Tustin, California. ``For Titan, it's a combination of Nissan being a bit of an unknown in the large pickup segment and the high price of gas coming up to bite them.''

Americans buy about 3 million pickups annually. It is the largest vehicle segment still dominated by the traditional U.S. automakers, General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler. Nissan and Honda have joined Toyota Motor Corp. in adding new pickup models, yet U.S.-based brands still hold 82 percent of pickup sales this year, according to Autodata Corp.

Overall pickup sales have risen 0.8 percent through October, outpacing the 0.1 percent gain for all light trucks. Sales of compact and full-sized pickups at Toyota and GM's Chevrolet division have risen, while those from Ford and Chrysler's Dodge unit have dropped.

Titan's Shortfall

In its second full year on the market, the Titan may again fall short of Nissan's goal of 100,000 U.S. sales. Nissan sold 73,708 Titans through the first 10 months. Honda, which began selling the Ridgeline in March, also may miss its annual sales goal of 50,000 units, said John Mendel, the Tokyo-based automaker's U.S. senior vice president, in an interview this week.

Nissan, which in October posted a 17 percent sales drop and saw Titan sales fall 33 percent from a year ago, will ``feather'' back truck production and is ``trying to move up sedan production,'' Jed Connelly, Nissan's U.S. senior vice president said in an interview this week.

``We are reducing full-size production a little bit,'' Connelly said. ``We are trying to get it down.''

The Canton plant is boosting production of Altima sedans to offset the lower production rate for Titan, the company said.

Nissan dealers had a 135-day supply of Titans at the end of October, according to Autodata, more than twice the 60-day level that industry analysts view as normal.

Ridgeline

Similarly, Honda is reducing Ridgeline production to prevent an inventory buildup that could lead some dealers to sell the model at a discount, said Honda's Mendel, in an interview this week in Las Vegas.

``I suspect the average consumer incentive in the mid-size truck segment was probably $4,000 to $5,000,'' Mendel said. ``This is a brand-new vehicle. We're not known for consumer incentives.''

Honda often exceeds its public targets for new models. Sales in 2003 of its Element wagon were 40 percent more than forecast, and demand for Pilot sport-utility vehicle a year earlier was about 50 percent higher than Honda first expected.

Honda dealers had an 83-day supply of Ridgelines on Nov. 1, down from 135 a month earlier, according to Autodata, of Woodcliff Lake, New Jersey.

Prices for the 247-horsepower, four-door Ridgeline, Honda's first pickup and the first pickup with a lockable trunk, start at $27,700. Toyota's mid-size Tacoma pickup with a four-door cab has a base price of $22,040, and Chrysler's four-door Dodge Dakota begins at $19,435, according to company Web sites.

Honda's U.S. operations are based in Torrance, California, and Nissan's are in nearby Gardena. Honda's American depositary receipts fell 70 cents to $27.30 yesterday in New York Stock Exchange composite trading and have gained 4.6 percent this year. U.S. shares of Nissan fell 54 cents in Nasdaq Stock Market composite trading. They've declined 8.7 percent this year.