Why the New Armada Won't Be Good Either Way for Nissan

"Mike Farber" (mikefarber)
02/24/2016 at 15:56 • Filed to: Nissan Armada, Infiniti QX80, Sales Flop

After 12 years, the Nissan Armada finally gets a significant refresh for the 2017 model year. And while that may sound like good news for Japanese Truck fans (a group probably populated by slightly more people than there were supporters of Jim Webb’s presidential campaign), for all of Nissan, including subsidiary Infiniti, it’s a move comparable to that of one digging their own grave.

The 2017 Armada can be recognized in most other necks of these woods we call Earth as the Nissan Patrol, which has been around since 1951. The current generation Patrol, which has been in production since 2010, is the direct basis of chassis, as well as body for the Infiniti QX80, née QX56. The QX80 is Infiniti’s most expensive model currently available, topping off at around $90,000 for a fully kitted Limited trim. Its comfortable cabin and upscale appointments make it a top seller amongst luxury car buyers. Hell, my dentist drives one.

However, it seems to be the Armada’s assets that might be causing the problem which is about to be introduced. When compared side-by-side to its “luxury” counterpart, no differences seem to be too significant between the two models.

The 2017 Armada’s exterior, while carrying Nissan’s all to familiar V-Motion corporate face, contains brightwork that gives it an upscale touch...

...as does that of the Infiniti QX80. (Image courtesy of CNET)

The interior of the Armada looks plush, opulent and...

...identical to that of the QX80. (Well, except for the wood steering wheel and analog clock, but those differences are only minor.)

The problem here is that the presence of either model will drive down the sales of the other. It will happen. That’s why everyone buys the LX570, but turns their back to the Land Cruiser. Their features are so similar, but one of these factors will drive buyers from one car and attract them to the other. Either it is the price or the badge stamped on the steering wheel. People who are willing to give up more than $80,000 for a full-size SUV would much rather put that sacrifice towards a new Lexus than a new Toyota. However, if a car with similar features costs significantly less than another offering from the same parent company, (Honda Accord Touring vs. Acura TLX Tech) buyers will more likely flock over to the one that’s cheaper.

As the price of the new Armada is not yet known, we don’t know which model will wind up being the one with poorer sales. But the situation stands clear. If the Armada will cost upwards $70,000, as is the QX80, it won’t do much better than it is right now. If it will cost consumers less than that, mamboing with the prices of the Ford Expedition and Chevrolet Suburban, the QX80's top seller title will soon be ripped from its name.

And my dentist will have to do some rethinking.

DISCUSSION (18)

Klaus Schmoll > Mike Farber
02/24/2016 at 16:13

You are a brave man! Going to a blind dentist takes some balls.

Steve in Manhattan > Mike Farber
02/24/2016 at 16:30

I truly don’t understand this vehicle’s appeal (more precisely, lack thereof). The styling is horrible, and the interior seems cramped given the exterior dimension. The depreciation must be staggering. At those prices, get a Rangie, an XC90, a Land Cruiser. And did I mention it’s ugly?

MUSASHI66 > Mike Farber
02/24/2016 at 16:57

Kinja'd!!!

Don’t you remember that the first Armada and the first QX56 were essentially the same car as well, and they managed to coexists just fine? Difference was the front clip and the interior.

GE90man > Mike Farber
02/24/2016 at 17:18

the problem here is that the Nissan looks better. so unlike a 2016 Nissan, with all the other nissans with crazy obscure looks. (see murano, maxima, Altima)

HammerheadFistpunch > Mike Farber
02/24/2016 at 18:04

“That’s why everyone buys the LX570, but turns their back to the Land Cruiser”

This isn’t true, people turn their backs equally to both. 2700 land cruisers to 3800 LX in 2015.

HammerheadFistpunch > Mike Farber
02/24/2016 at 18:08

Another note, I think you are glazing over some important information:

a. The S trim can be had with cloth seats...CLOTH! not to mention 2wd

b. All its direct competitors are in the same rarefied market space. Go price out a Sequoia or Tahoe or Expedition...yikes.

c. While the platinum trim will bump up against a base QX there is so few sales with the QX that its not likely to be an issue.

d. Just like the LX vs Land Cruiser there are some thing you can’t get on the Patrol that come standard on the QX, namely HMBC as well as the “premium” textures and audio features.

My guesses for price are starting in the high 40's which will make it very competitive, especially considering how well made a vehicle it is.

The other thing to factor in is that Nissan is currently having a helluva time unloading these things in other markets for 2 very important reasons:

1. gas only

2. They still sell the better Y61 Patrol along side it.

Which means that Nissan needs to, and is motivated to unload these things cheap to clear out inventory and keep its factories humming along. For example, they recently dropped the price $27500 (!) AUD in Australian markets to entice people to bite. I suspect these will be VERY price competative.

Mike Farber > HammerheadFistpunch
02/24/2016 at 22:22

I did my research prior to writing this piece. The lowest level you can get is an SV, and while it does come with cloth seats, you need to consider that that trim sells the least. Most buyers of the current generation go for the platinum due to its features. With that being said, if the most popular trim level happens to be just as luxurious as a car that’s exactly like it only $15,000 more, guess which one consumers will most likely go for?

Mike Farber > MUSASHI66
02/24/2016 at 22:30

Let’s take into account that back then, the Armada was as utilitarian as it gets. The highest trim level you could get at the time, the SE, came with all the tech goodies, but still felt like you were in a Nissan, nothing nicer than that. The QX56 looked nicer. It was laden with leather, wood and chrome. It had a softer ride, and was overall well worth the upgrade. Now, comparing the Platinum trim of the new Armada to a base QX80 with similar features, you can’t really tell the difference other than price!

HammerheadFistpunch > Mike Farber
02/24/2016 at 22:36

Their press kit says s trim

MUSASHI66 > Mike Farber
02/24/2016 at 22:54

So, your point is that the loaded version of a cheaper models overlaps with the base version of a more expensive model, and hence it won’t sell?

LC/LX

Tahoe/Escalade

Traverse / Acadia / Acadia Denali

Some have different engines, but Infiniti has what Nissan doesn’t - a luxury nameplate. No luxury buyer will buy a Nissan because it is almost as nice as Infiniti.

I simply don’t understand why you’d pick on Armada when literally every other manufacturer does it and has similar issues.

HammerheadFistpunch > Mike Farber
02/24/2016 at 22:54

Apologies, SV is what I thought was S and SL is next higher

MUSASHI66 > Mike Farber
02/24/2016 at 22:55

You are completely ignoring the luxury nameplate cachet. Loaded Nissan is still a Nissan - base Infiniti is a luxury car that screams “I’m loaded”.

Mike Farber > MUSASHI66
02/24/2016 at 23:15

You make a good point. However, people tend not to buy stripped down Armadas and Suburbans (and I mean STRIPPED like cloth seats, non-4wd stripped) because the starting price for these cars is still high. People feel like if they want to spend upwards $40,000 on a car, they had better get leather seats or 4wd on it. As for cars like the Traverse, that come with such features as cloth seats and 4wd, they are also priced to match.

Now I do mention the LC and LX in here too. The truth is that people tend not to buy the LC because they don’t want to spend $85,000 on a Toyota. It faces the same predicament as the Armada. It has the same kinds of features: nav, heated and cooled seats, rear seat entertainment, etc. But because it has been plagued by a less upscale badge, people would rather sacrifice that little extra for a car whose badge actually makes a statement.

Mike Farber > MUSASHI66
02/24/2016 at 23:20

But why do more people buy Ford Fusion Titaniums than base Lincoln MKZ’s? Honda Accord Tourings than Acura TLX’s? Think about it. The luxury nameplate cachet is a determining factor of sales, yes. That’s why you never see a new LC on the roads anymore. But if it’s one thing us Americans love, it’s value for your dollar.

Mike Farber > MUSASHI66
02/24/2016 at 23:22

And yes I have identified that people would rather drive a Lexus than a Toyota in the text, alluding to the contention you just mentioned.

MUSASHI66 > Mike Farber
02/25/2016 at 00:18

Because luxury cars always sell in lesser numbers than non luxury? Because they are cheaper? Because there are tons more delaerships and advertising for cheaper cars versus luxury cars?

Luxury SUVs are license to print money. Escalade is a Tahoe with some lipstick, yet it sells for close to 100k. Now that Infiniti and Armada and Patrol are all one the same platform, you have three vehicles sold across the world. Development cost can be spread across them. Any Infiniti sold is just ca Ching for Nissan.

Armada will sell for way less than the Infiniti - Currently, starting MSRP is off by 23k. I just don't think your theory holds water.

BruceS85 > Mike Farber
03/24/2016 at 00:50

Fugly.

Tolson37 > Mike Farber
01/14/2017 at 19:44

You’re no prophet that’s for sure. Your maturity in the industry is lacking and apparent by your article.