Automotive News Canada - September 2020 - 19

Titan fallout
18

It was a slow seller, but
every little bit helps and
dealers had dollars tied
up in service equipment
By URVAKSH KARKARIA

FOR AUTOMOTIVE NEWS CANADA

NISSAN'S DECISION TO KILL THE
Titan full-size pickup in Canada is
designed to boost the brand's prospects
by concentrating on its core sedans and
crossovers.
But the automaker's long-term strategy is causing near-term pain for many
of its Canadian retailers, such as Rick
O'Neill.
Nearly half of the 212 Nissan dealers
in Canada will feel a financial squeeze
from the loss of the Titan, with about
50 retailers being "severely impacted," said O'Neill, president of O'Neill

Nearly half of the 212 Nissan dealers
in Canada will feel the loss of the
Titan on their bottom line, said
Newfoundland dealer Rick O'Neill,
who chairs Nissan's Canadian dealer
advisory board. P H O T O V I A R I C K O ' N E I L L

Auto Group and chairman of Nissan's
Canadian dealer advisory board.
The Titan had accounted for about
15 per cent of sales at O'Neill's three
Nissan stores in Newfoundland.
"It's like someone taking your right
arm," he said. "I had put so much effort
and money into the Titan."
For O'Neill and other truck dealers, the decision isn't just about the end
of a model, but the end of a business
venture. Nissan retailers have plowed
hundreds of thousands of dollars into
expanding their service centres and
adding specialized tools to service the
big truck.
Dealers "are scrambling to find
out how they make up the lost gross
that they badly need," O'Neill told
Automotive News Canada in early
September. "They don't have a direction
yet as to where the lost income is going
to come from."
Orangeville Nissan in suburban
Toronto has invested more than $500,000
in infrastructure and
other improvements to
sell the truck, including
wider service bay doors
and 12,000-pound-capacity (5,450-kilogram) lifts.
The Titan reprePatterson:
sented 13 per cent of
"We're truck
total sales last year
country up
at Orangeville, said
here. It's
General Manager
tough to
Jamie Patterson.
replace a
truck when
"We're truck counyou don't
try up here. It's tough
have a truck."
to replace a truck
when you don't have a
PHOTO
VIA JAMIE
truck."
PAT T E R S O N
What the Titan
lacked in volume, it made up for in margin. Dealer profit on the truck is four
times higher than on the Sentra, O'Neill
said.
"You sell four to five times the acces-

* S E P T E M B E R 2020

Orangeville Nissan General Manager Jamie Patterson said more aggressive
pricing was needed for the Titan. "We launched this vehicle with a $75,000
truck, trying to break into a market that is owned by a $40,000 [Ford] F-150."
PHOTO: NISSAN

sories on a pickup than you would on a
Sentra," he said.
The truck customer is also likely to
return for service with greater frequency.
"Trucks get driven more and require
more maintenance," O'Neill said.

A TOUGH SELL
For Nissan, making the case to keep
the low-selling Titan in Canada was
becoming harder to justify.
Sales of the Titan last year cratered
to 2,807, down by nearly half compared
with 2018, according to the Automotive
News Data Centre in Detroit. In the first
half of 2020, Nissan sold 800 Titans in
Canada, accounting for just 0.5 per cent
of the full-size pickup segment.
Titan was not a "core product" for
Nissan in Canada, Nissan Canada CEO
Steve Milette said in an August interview.
"The Titan represented incremental
business for us. This decision was about
what we need to do to focus and prioritize our resources to move the Nissan
brand forward in Canada versus Titan
as a product itself."
The automaker's focus in Canada
now is on directing investment into
higher-volume vehicles, including the
Kicks, Qashqai and Rogue crossovers,
the Sentra sedan and the Frontier midsize pickup.

"We are going deep on the core car
lines for us in Canada," Milette said.
"We will invest massively in the nameplates that will move
this brand forward."
The Titan's lack
of market traction in
Canada was partly the
result of a misfiring on
execution, dealers said,
adding that the secMilette: The
ond-generation truck
Titan was
was launched in Canada
not a "core
with insufficient incenproduct" in
tive support.
Canada.
"We launched this
FILE PHOTO
vehicle with a $75,000
truck, trying to break into a market
that is owned by a $40,000 [Ford] F-150,"
Patterson said. "We needed to compete
on price, and we never were able to put
on the programs that were necessary.
We needed aggressive lease payments."
As in the United States, Nissan has
struggled against the Detroit Three
brands, which have a combined 96.5 per
cent share of the full-size pickup market
in Canada.
Persuading pickup buyers to even
consider the Titan was a slog, O'Neill
said.
"I got volumes that the factory was
very pleased with out of my stores," he
said. "But I never got the volumes out of
them that I was pleased with." - ANC

EV launches still charging ahead amid pandemic
Cadillac, Ford and
Hyundai appear
to be on track for
delivery of new
electric vehicles
By JOHN IRWIN

AUTOMOTIVE NEWS CANADA

DEALER KEVIN ZIMIC is
gearing up for the electric
future by moving his Ford
store into a new building to
accommodate the 2021 Mustang
Mach-E, one of a slew of electric vehicles being launched by
automakers over the next few
years.
Zimic's new Cambridge,
Ont., dealership will be "much
more reflective" of Ford's EV
plans.
"We've got to get used to
what the shop floor of the
future looks like," said Zimic,
who also heads the Ford
national dealer council.
"You're going to see the toolboxes shrink and the software

and the hard drives in the laptops that my technicians currently use get more robust and
substantive."

NO PANDEMIC PANIC
While COVID-19 has put
pressure on automakers'
research-and-development budgets, many are proceeding with
their EV launch plans.
In August,
Hyundai
and Cadillac
were among
the brands to
detail plans for
upcoming vehicles.
Zimic:
As part
"We've got
of its pledge
to get used
to electrify
to what the
its lineup by
shop floor
2030, Cadillac
of the future
unveiled its
looks like."
first fully elecFILE PHOTO
tric vehicle,
the Lyriq crossover, which is
claimed to have more than 480
kilometres of range.
Shane Peever, Cadillac
Canada managing director,

said the luxury brand expects
to have "significant" sales of
the Lyriq, which launches
in 2022. The Lyriq will target
existing customers who might
not have considered buying an
EV before, Peever said.
"Because the brand is shifting to an EV strategy, it's critical for us to make that connection with our own customers,"
he said.
Although he would not
provide details, Peever said
Cadillac Canada will "spend
quite a bit of time to prepare"
its dealer network for the
launch of the Lyriq.
Hyundai Canada plans to
launch three new Ioniq EV
models over the next four
years. The decision by the
automaker to spin off the Ioniq
nameplate into its own subbrand will help distinguish it
from the rest of the company's
lineup, said Hyundai Canada
CEO Don Romano.
The company also plans to
use its Hyundai for Hire service, currently being piloted in
Ontario, to help people become

Cadillac will "spend quite a bit
of time to prepare" the brand's
dealerships for the launch of
the Lyriq electric crossover,
said Shane Peever, Canada
managing director.
PHOTO: GENERAL MOTORS

more comfortable with driving
EVs. Under the service, customers rent vehicles from dealers for extended periods, allowing them to get a feel for how
the vehicle would fit into their
lives.

SALES PLUGGING AWAY
The push by automakers
for electrification has been
spurred in recent years by rising fuel-efficiency mandates
around the globe as well as
pressure from both Wall Street
and environmental groups.
While EV sales have grown,

they still lag far behind those of
internal-combustion vehicles.
In Canada, EV sales
accounted for about three per
cent of all new vehicles sold in
2019. During the second quarter of 2020, EV sales plunged
50 per cent compared with the
same period in 2019, according
to Electric Mobility Canada.
The new-vehicle market as a
whole fell about 45 per cent.
But proponents of EVs hope
the launches of new electric
models and the marketing surrounding them will boost consumer demand.
"The more that you start
to see ads and all the different
things, it gets into people's psychology that this is an option
for them," said Cara Clairman,
CEO of Plug 'n Drive, which
helps raise EV awareness and
offers test drives in a nonsales
environment.
"The more the merrier,
because you'll get the awareness coming up. Even if it's
a brand [consumers are] not
interested in, they might start
thinking about it." - ANC

Automotive News Canada - September 2020

Table of Contents for the Digital Edition of Automotive News Canada - September 2020