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Japanese automaker's U.S. plants slash output of Titan, other big vehicles after rise in gas prices.

Christine Tierney / The Detroit News

Saddled with large inventories of light trucks, Japanese automaker Nissan Motor Co. has cut back production of the large Titan pickup and big sport utility vehicles built at its U.S. plants.

Last month, Nissan slashed output of the Titan at its Canton, Miss., plant by 29 percent, to 5,680 vehicles.

Three years ago, Nissan anticipated that it would be producing more than 8,000 Titans a month on average at the plant to sell more than 100,000 a year.

But the Japanese automaker has been hurt, much like its Detroit rivals, by slumping demand for large vehicles after the spike last summer in gas prices.

Nissan launched a slew of big vehicles in 2003 in the U.S. market, where it generates about 60 percent of its total profit. But both the Titan and Quest minivan fell short of their goals, slowing the Japanese automaker's momentum in the U.S. market.

Last month, its U.S. sales dipped 1 percent. Nissan's car sales were up, but truck sales declined 1.6 percent, reflecting a 9 percent drop in Titan sales, a 21 percent drop in sales of the large Armada SUV and a 31 percent slump in Quest sales ahead of the rollout of a restyled minivan.

Nissan has overall vehicle stocks estimated to last 60 days, but with the Titan "we've crept up close to 90 days, and we'd like to right-size the inventory," said Jed Connelly, senior vice president for sales at Nissan North America. "We're trying to have production match the current sales rate."

Nissan also cut production of the Armada by 11 percent in January and reduced output of the premium Infiniti QX56 large SUV by 10 percent from year-earlier levels. Overall, it pared truck, SUV and minivan output by 9 percent.

Nissan's production of light trucks, including the Titan, peaked in March, the last month of the Japanese fiscal year. But Titan production has declined for five consecutive months, and Connelly expects its full-year sales will fall slightly short of last year's levels.

While the Titan's struggle reflects the weakening demand for gas-guzzlers, it also illustrates the difficulty newcomers face in the big pickup segment, where brand loyalties to Detroit's automakers run high.

Competition is expected to increase as General Motors Corp. rolls out new large pickups and Toyota Motor Corp. launches a full-size pickup early next year.

Connelly estimates Nissan will sell between 85,000 and 90,000 Titans this year, down from around 92,000 in 2005.

"When you're breaking into a segment and you're attacking the sweet spot where the domestics have had a strong resonance for their brands, it's a long road," said Jeremy Anwyl, president of auto research Web site Edmunds.com.

"The Titan is a perfectly credible product, but it's going to take a while to be accepted," he said.

In an interview at the North American International Auto Show last month, Nissan CEO Carlos Ghosn said he expected U.S. vehicle sales would be flat in 2006, but car and truck sales would fluctuate sharply. "You'll see volatility in the mix," he said.

"Small cars sales will increase one month, and then there'll be a pushback from large SUVs."

This year, Nissan expects to increase U.S. sales slightly after introducing a new Sentra sedan and a Versa subcompact.

Despite cutthroat competition in the large vehicle segments, Nissan executives are trying to hold the line on incentives, even if it means losing a few thousand sales. "We'd rather protect the brand," Connelly said.

According to Autodata Corp., Nissan incentives run about $2,310 per vehicle, in line with the industry average and well below the discounts on domestic brands.

CNW Marketing, another firm that calculates discounts, estimates Nissan's incentives averaged just under $2,100 in December, less than those of all its major rivals.

"We don't have incentives like Dodge, Chevrolet and Ford," said Steve Gonzales, new car sales manager at Charlie Clark Nissan, a dealer in Harlingen, Texas. "Our incentives aren't huge."

Nissan is definitely hurting in their truck department sales due to high gas prices and more competition. However, it's a good trend that Americans are warming up to the idea that gas consumption is important in their vehicles. Hopefully, with time...we'll see less SUV and trucks with a lot of HP and better gas mileage.