Houston Cars

When an automaker introduces a brand new vehicle, they always hype it as much as possible, and say how it will increase sales. For example, Brand X sells 200,000 vehicles per year. They introduce the brand new Ultra Mega Crossover, with a sales goal of 40,000 units per year. With this in mind, they expect / forecast sales of 240,000 vehicles per year. Makes sense right? Absolutely, one hundred percent wrong.

I’m going to use Nissan as a perfect case study. Very recently, Nissan introduced two brand new models - the Altima Coupe and the Rogue. Both models have done pretty well thus far. However, Nissan sales have been declining overall. Shouldn’t it be the opposite? Let’s take a look at who buys the Altima Coupe and Rogue.

The Murano is a pretty popular CUV - lots of folks want to be seen in one. The problem is the price - not everyone is comfortable swinging that large of a monthly payment. The Rogue is a perfect switch vehicle - 90% of the style for a fraction of the price. Over on the Altima Coupe side, the problem is similar. Buyers aren’t conquests from the Accord coupe. Buyers are would-be Altima sedan buyers - already one of the sportiest midsize sedans on the road. A switch to a coupe just makes sense.

Just because an automaker enters a new market, does not mean their numbers will go up. In-brand cannibalization is a huge concern, and one that manufacturers have a horrible habit of ignoring.