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Nissan May Drop Xterra From Its Line-Up

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On: Tue, Aug 31, 2010 at 12:20PM | By: Chris Weiss

Nissan May Drop Xterra From Its Line-Up

What a difference a decade can make. At the turn of the millenium, auto manufacturers couldn't pump SUVs off the lines fast enough. But in 2010, they can't seem to give them a way. Blame the economy, rising gas prices, a reborn effort to save the environment and a certain self-awareness that just didn't exist a decade ago, but manufacturers are watering down old SUVs with unitized frames and swank interiors and/or killing off the SUVs of old altogether. We saw it with the new Ford Explorer; the new Dodge Durango is set to take the same direction and now another body-on-frame SUV is on the chopping block. Nissan may eliminate the Xterra from its line, leaving mid-size SUV traditionalists less options than ever.

Like any company, Nissan's decision will be guided by its bottom line. Sales of the Xterra have been floundering, with only 12,186 sold as of July this year, compared to 88,578 sold in 2000. According to Wards' numbers, automakers in general sold a total of 211,042 mid-size SUVs in 2009. Compare that to the 1.65 million they were selling back in the 2000 year, and it's painfully obvious that SUVs are simply no where near the cash cows they once were.

Combine the dismal sales of the greater mid-size market with tightening Corporate Average Fuel Economy (CAFE) standards, and you have the recipe for extinction. With CAFE standards set to rise to 34.1 mpg by 2016, a number that is fleet-wide and includes both passenger cars and light trucks like the Xterra, the Xterra's fuel economy numbers of 17 mpg combined certainly won't help Nissan's cause.

While Nissan plans to use smaller cars like the Sentra to boost its fleet-wide economy, it may be forced into cutting some of its larger, gas-guzzling SUVs. And given the poor market performance, that decision will probably be as easy done as said.

Larry Dominique, Nissan vice president of advanced product and product planning and strategy, explained the predicament to Wards. “Xterra’s in a tough segment; the segment’s falling apart. There’s one high-volume vehicle left (in the segment) and that’s (the Jeep) Wrangler. Everybody else has dropped out due to really low volumes. With (new U.S. corporate average fuel economy rules) Xterra’s going to be a tough vehicle to keep around.”

Body-on-frame loyalists fret not: while your (and my) options are shrinking, Nissan does plan to continue producing its Pathfinder SUV, according to Wards' report. It also plans to continue the Frontier truck.

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