Nissan to Add Budget Model to U.S. in 2007

Nissan Motor Co. said Monday that it would introduce a new small car to the United States in 2007 to compete for younger, budget- conscious buyers who might otherwise shop for used vehicles.

The model will be smaller than the Japanese automaker’s compact Sentra, which starts at $12,400.

Nissan’s new entry will probably be derived from one of its Japanese-market models, such as the bug-like March subcompact or the boxy Cube, a sort of mini-minivan.

The car would compete with Toyota Motor Corp.’s youth-oriented Scion brand.

Executives at Gardena-based Nissan North America consider an entry-level vehicle with youth appeal a key to ensuring long-term growth in the U.S. market.

Nissan, Japan’s second-largest carmaker, is one of the fastest-growing auto companies in the United States, with its sales through August up 23% from a year earlier. Nissan’s goal is to increase U.S. sales to 1 million cars and trucks next year, up from 794,481 in 2003.

But its growth thus far has been spurred by larger models, including the new Titan full-size pickup, that are generally too expensive for younger buyers.

Additionally, Nissan and other automakers have come under fire for promoting large, gas-guzzling models. So they are looking at small cars as a way to increase the overall average fuel economy of their vehicles.

Separately Monday, Nissan said it would redesign the Sentra for 2006.