Nissan Boosts U.S. Altima Capacity to Challenge Toyota

Nissan Motor Co. (7201) said it plans to run three daily assembly shifts at U.S. plants building a revamped Altima, as the company tries to challenge Toyota Motor Corp. (7203)’s Camry, the top-selling U.S. passenger car.

Production of the 2013 Altima began yesterday at Nissan’s Smyrna, Tennessee, plant and the car goes on sale late next month. The Yokohama, Japan-based company’s sedan outsold Honda Motor Co.’s Accord in 2011 and takes aim at Camry this year, said Bill Krueger, Nissan’s vice chairman of the Americas.

“We didn’t put all the investment into this product, put in all the features, with an expectation to be No. 2,” Krueger told reporters yesterday at the Smyrna plant. “Ultimately, the consumer is going to vote with their purchase whether or not we sell more than anyone else.”

Competition among midsize sedans is fierce this year with the Altima coming on the heels of General Motors Co. (GM)’s new Chevrolet Malibu, and followed by Honda’s revamped Accord and Ford Motor Co. (F)’s restyled Fusion. Camry, redesigned in 2011, remains the segment’s volume leader, with sales of Hyundai Motor Co. (005380)’s Sonata and Volkswagen AG (VOW)’s new Passat sedan rising.

Combined sales of those models and Kia Motors Corp. (000270)’s fast- selling Optima sedan grew 24 percent this year through April to 674,108, more than double the 10 percent industrywide increase for all cars and light trucks sold in the U.S., according to Autodata Corp. Through April, Camry led Altima, the second-best selling car, by 29,626.

Record Sales

The best year of U.S. Altima sales was 2007 when Nissan sold 284,762. The Camry also peaked that year at 473,108. Toyota has said it wants to sell to at least 360,000 this year.

The midsize sedan segment is growing and the combination of a new Altima and higher production volume will boost sales of the model, said Alan Baum, principal of auto-industry forecaster Baum & Associates in West Bloomfield, Michigan.

“Can they grow volume? Yes,” Baum said. “Can they be the leader in the segment? I don’t think so. Last year they did very well, but they also benefited from the limited supply of Camrys and Accords.”

Natural disasters in Japan and Thailand last year led to parts shortages that reduced North American Camry and Accord production. Those models, typically the volume leaders in midsize sedans, “are too important for both companies and they’ll fight to keep them at the top,” Baum said.

Retaining the title of top-selling U.S. car “isn’t a stated goal,” said Greg Thome, a Toyota spokesman.

“It’s something that’s been so consistent over the years that it’s something we value,” Thome said. “We know that when you’re No. 1, everyone is targeting you.”

Rising Capacity

Nissan can build more than 300,000 Altimas a year at Smyrna, and at its Canton, Mississippi, plant, Krueger said. Capacity will grow as a result of running three shifts at both facilities, and may rise to 400,000 units by next year should U.S. demand for Altimas reach that level, he said.

“We’d figure out a way to do that,” Krueger said in an interview. He declined to give a specific sales or production volume target for the new model.

Toyota, Asia’s largest automaker, already has capacity to produce 450,000 Camrys annually at its Georgetown, Kentucky, plant and at Fuji Heavy Industries Ltd. (7270)’s Subaru factory in Lafayette, Indiana, that builds the model under contract for Toyota. The two lines “can do more with overtime,” Mike Goss, a spokesman for Toyota’s production unit, said by e-mail, without elaborating.

The 2013 Altima has a $21,500 base price that’s $200 lower than that of the current entry-level car. Altima’s 2.5-liter, 182-horsepower engine gets 38 miles (61 kilometers) per gallon in highway driving, the best in the segment, and 31 mpg in combined city and highway driving, the company said.

Smartphone connectivity and Bluetooth audio functions are standard on all versions of the Altima, the company said. The top-end Altima, with a 270-hp, V-6 engine, will cost $30,080, Nissan said.

The company’s North American unit is based in Franklin, Tennessee.

To contact the reporter on this story: Alan Ohnsman in Smyrna, Tennessee, at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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