Subcompact Cars Are Dying, Yet Nissan Is Selling Five-Year-Old Versas Like They're Crossovers or Something
Through the first-half of 2016, passenger car sales volume is down 8 percent in the United States.
It’s not quite that bad in the subcompact car category, but sharp declines from the Chevrolet Sonic, Ford Fiesta, Honda Fit, Toyota Prius C, Toyota Yaris, plus the disappearance of the Mazda2 pushed subcompact car volume down 6 percent.
Yet U.S. sales of the Nissan Versa are on the rise.
Not only are Nissan Versa sales on the rise, the Versa is consistently America’s top-selling subcompact car.
Not only are Versa sales rising now, Versa sales have been on the rise for the last seven years.
Topping the subcompact segment in 2016 is not the challenge it’s been in the past for Versa. Sales of the subcompact Nissan’s seven key rivals fell 19 percent so far this year, a loss of 36,448 sales. (We’ve excluded the Scion iA as it wasn’t on sale in the first-half of 2015.)
The Detroit duo — Sonic and Fiesta — have seen their market share slide from 28 percent in the first-half of 2015 (and 31 percent in 2013) to just 22 percent in 2016. Despite adding 16,427 sales via the Scion iA, Toyota’s total subcompact volume is up by fewer than 3,000 sales because of sharp drop-offs from the Prius C and Yaris.
The Hyundai Accent is on track to end 2016 at a seven-year high, but its Kia Rio partner’s modest 4-percent uptick will likely still result in a 39-percent drop compared with 2013 and half as many sales as the Rio managed in 2002.
Combined, the two top-selling Versa rivals haven’t sold as often as the Nissan so far this year.
The Versa’s status among subcompact cars is noteworthy, but so great is its margin of victory — 33,131 units over the second-ranked Accent through six months — that its performance relative to cars in general may be more telling. Year-to-date, the Versa is America’s 13th-best-selling car, ahead of the Kia Soul, Ford Mustang, Kia Optima, Volkswagen Jetta, Chevrolet Impala, and Kia Forte.
For every Versa/Versa Note sold in U.S. Nissan showrooms, Nissan sells 1.7 copies of the Sentra, another Nissan passenger car bucking the trend and sourcing growth in a dying car market. Sentra volume is up 16 percent this year; Altima volume is slightly better than flat, year-over-year Maxima volume has more than doubled, and the Nissan brand’s total car volume is up 9 percent.
Given the aversion to small, affordable, efficient cars in a market that’s gone crazy for subcompact crossovers and pickup trucks, the simple fact that Versa sales have increased would merit mention. But Versa sales are growing fast.
The 8.2-percent improvement through six months is better than the 1.4-percent industry-wide improvement, the 7.1-percent growth rate among pickup trucks, and the 8.0-percent increase in total SUV/crossover volume.
Nissan is on pace to sell 156,000 Versas in the U.S. in 2016. That’s 11,000 more than last year and 88-percent more than the Versa managed when its improvement streak began. Versa volume jumped 20 percent in 2010, levelled off in 2011, then grew 14 percent in 2012, 4 percent in 2013, 19 percent in 2014, and 3 percent last year.
What’s the difference? Why does the Versa succeed when its rivals are fading and industry observers conclude that consumers are done with subcompacts? Why has the Versa thrived when some rivals are giving up and many others don’t even bother with the segment in North America?
“Success in compact cars is very important for brands as they’re often the first new car purchase of an individual and become a source for building brand loyalty,” Nissan’s director of communications, Dan Bedore, told TTAC earlier this month.
Recognizing this, Nissan is aggressive in making sure the Versa ranks high on the affordability quotient for first-time car buyers. A basic Versa S sedan at $12,825 includes air conditioning and Bluetooth. The least costly Ford Fiesta is $14,965. That 17-percent jump is a big leap for a budget-conscious economy car buyer.
Does the theory essentially go: customer buys a Versa, then a Sentra, then a Rogue, and then an Infiniti QX60, thus making it worth it to Nissan to sell a Versa at a low price (with presumably low margins) in the first place? I asked Nissan’s Bedore.
“It’s a theory, and a very important one,” Bedore says. “This is why the dealer experience is so critical. If the car meets their expectations and the dealer forms a relationship through the sales and service experience, it can be a great long-term relationship for everyone.”
Although it’s a somewhat forgettable, low-dollar car to many, Nissan takes its Versa seriously.
“Versa is so practical in so many ways that it’s as much a source of pride to us as anything else we build and sell.”
Practicality is certainly where the Versa excels. The rear seat is spacious enough to be acceptable in a larger midsize car. The Honda Fit, oft-praised for its minivan-like cargo area, has 12 percent less cargo space with the rear seats upright than the Versa Note, which forms roughly 40 percent of Versa volume. And the fight loses all fairness when the Versa Note’s $1,660 price advantage over the Fit is taken into account.
The Nissan Versa is no thrill ride for the typical automotive enthusiast. The sedan is frumpy and its continuously variable transmission is not one of the industry’s better CVT implementations. Yet Nissan has the U.S. subcompact market cornered, pleasing more and more of the right people with the right balance of features at the right price point.
Timothy Cain is the founder of GoodCarBadCar.net, which obsesses over the free and frequent publication of U.S. and Canadian auto sales figures. Follow on Twitter @goodcarbadcar and on Facebook.
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