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Market Insight: Nissan banks on X-Trail sales

Fighting chance: Australia’s number-one small SUV only two years ago, the new-generation X-Trail has broader appeal than the previous model and should boost sales back up beyond 1000 units a month.

New X-Trail SUV crucial in Nissan Australia’s quest for improved sales performance

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Market Insight logo4 Apr 2014

NISSAN Australia has set out to improve its position in the marketplace, and the redesigned X-Trail small SUV launched this week will be a key part of the equation.

The company has stopped short of specifying sales targets for the third-generation model, with newly appointed managing director Richard Emery promising to be “realistic about every single product line” and distancing himself from some overzealous and overambitious predecessors who, in his words, had “rose-tinted glasses on”.

Although VFACTS sales figures paint a gloomy picture – first-quarter results released this week show the Japanese brand is down 38.3 per cent year-to-date in a market down 2.4 per cent overall – Mr Emery said Nissan was in a much-improved position compared to the second half of last year, in terms of its stock levels, sales rate and model line-up.

A lot is now resting on X-Trail, sales of which have fallen 36 per cent in the first quarter, and in 2013 were also 33 per cent in arrears compared to the previous year.

Based on its performance over the past 12 years, the SUV is clearly capable of significant improvement. And while a return to segment leadership might no longer be a stated objective, you can be sure that Nissan’s senior management will be working to reposition one of its biggest-selling models as a top-three contender with monthly sales back well beyond 1000 units and a share well in excess of its current 9.1 per cent.

The absence of a diesel engine until later this year is a limiting factor, but the new model has broader appeal with a seven-seat option, comes with sharp pricing and is backed by a heavy advertising presence in this launch phase – all of which underscore Nissan’s determination to secure strong sales from the get-go.

So far this year, Nissan has registered just shy of 2400 X-Trails at an average of 800 per month – although the run-out campaign and some early registrations of the new model pushed the SUV’s numbers up to 1214 in March alone.

This is the mark the company will be now aiming to achieve, month in, month out.

By comparison, sales of Mazda’s market-leading CX-5 – which commands 21 per cent of the segment – are up 16 per cent this year to 5537 units, or 1845 per month. CX-5’s 1932 units last month was a record March result for the model, its third-highest monthly return since launching in February 2012, and enough to make it the top-selling SUV in Australia, bar none.

Toyota’s RAV4 is next best placed with sales up a whopping 50 per cent this year over the first quarter of 2013, its 4906 new registrations equivalent to 1635 sales a month, while Subaru’s Forester (up 1.5 per cent YTD after a strong showing last month, up 43 per cent) is holding down third place with 3583 units, which is just under 1200 a month.

No other brand this year is even close to achieving 1000 units a month in one of the most important segments of the market, accounting for around 10 per cent of all vehicles sold in Australia.

Due consideration should be given to Hyundai’s slightly smaller ix35, which is now classified as a light-sized SUV and is the driving force in that segment with a 24 per cent share YTD, averaging 1500 units a month.

Between them, the top three mainstream small SUVS (under $60,000) – CX-5, RAV4 and Forester – currently soak up 53.5 per cent of the entire segment.

Honda’s CR-V is only narrowly ahead of X-Trail this year with sales down 34 per cent and its monthly average also around the 800 mark – these two models have 18 per cent share between them – while further afield are four models that account for most other buyers (for a combined 24 per cent share): the Kia Sportage (618p/month YTD), Mitsubishi Outlander (562), Ford Kuga (464) and Holden Captiva 5 (416).

Overall, this traditional mainstream small SUV segment is running lineball with last year – it has fallen 0.9 per cent for the first quarter, but the 26,233 sales recorded put it ahead of mainstream large SUVs and second only to small passenger cars.

Its sales might be down, but X-Trail – now in a much-improved new generation – remains a key player, as shown by its 1200-plus sales last month and its segment leadership only two years ago with more than 16,000 registrations.

The climb back has begun, but just how far it goes is now up to Mr Emery and his team, Nissan’s dealer network and, most importantly, the Australian buying public.

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