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Why Nissan Is Making Huge Changes to the 2016 Altima

By John Rosevear - Sep 26, 2015 at 11:40AM

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The Altima is just three years old, and it has been selling very well. But Nissan just spent big to give it a significant overhaul. Here's why Nissan is feeling major pressure to up its game.

Just three years after it was launched, Nissan is giving the strong-selling Altima sedan a major makeover for 2016. Source: Nissan.

Nissan (NSANY 1.17%) this past week rolled out its new 2016 Altima sedan. The 2016 Altima isn't all new, but it has received a surprisingly extensive overhaul.

The Altima was all-new just three years ago. Typically, automakers look to get five to seven years out of a new model before a complete redesign. To keep it fresh, the model is typically given a fresh look and a few improvements after a few years. 

Industry folks call that a "mid-cycle refresh." It's not usually very extensive. But what Nissan has done to the Altima goes well beyond the usual. That might seem surprising, because the current Altima has sold very well. But Nissan, like other companies that make strong-selling midsize sedans, is clearly feeling a lot more competitive pressure these days.

Surprisingly extensive changes for a strong-selling product
In a typical mid-cycle refresh, the changes are relatively minor and inexpensive for the automaker to make. A car might get a new front-end design, some tweaks to the interior, and a few relatively minor improvements to the suspension or electronic systems. 

That's usually enough to give sales a little boost. But the new Altima gets a lot more. The body has been restyled -- not just the grille but the hood and front fenders, too, as well as the taillights. There are also big changes inside. The seats have been reshaped, there are major changes to the dashboard, and many of the materials have been upgraded.

Among the changes to the 2016 Nissan Altima: a nearly new interior. Source: Nissan.

Changes to things like fenders, hoods, and dashboards are expensive. The sheetmetal parts like the hood and fenders require very expensive custom tooling to make, while dashboards are one of the most engineering-intensive parts of a car. 

Nissan has put a lot of money and effort behind its revamp of the Altima, much more than would normally be expected. But these aren't normal times for midsize sedans, and even though the Altima has sold well, Nissan is clearly feeling pressure to up its game.

Why Nissan felt pressure to overhaul the Altima
It's no secret that right now, more and more American car-shoppers are choosing SUVs over sedans.

That trend has been a boon for automakers that have strong SUV models in their portfolios. But for automakers that have traditionally depended on sedan sales, it has been a challenge.

It's not that sedan sales are collapsing. America's top three best-selling vehicles are pickups. But despite the market swing to trucks and SUVs, the top six best-selling midsize sedans as a group have out-sold the top three pickups combined this year. 

Another view of the new 2016 Nissan Altima. Source: Nissan

Sedans, particularly midsize sedans, are still very much a worthwhile and profitable market for the automakers with the top entries.The challenge comes from the fact that the pool of buyers willing to choose a sedan isn't really growing. With the economy still relatively strong, automakers all feel pressure to show sales growth. 

As a result, competition for those buyers has become extremely fierce. And it's getting tougher. 

Nissan's rivals haven't been standing still, either
In a way, Nissan is following in the footsteps of its rivals. Product cycles in this segment seem to be getting shorter, as automakers spend big to try to lure sedan-shoppers away from rivals.

Nissan isn't the first automaker to give its midsize sedan a more-extensive-than-expected makeover. Last year, Toyota (TM 2.79%) followed the same path with its Camry last year, making surprisingly big changes inside and out to a still-new model.

Honda (HMC 1.59%) just gave its Accord an extensive makeover. That makeover included suspension and frame changes intended to give the Accord a quieter and smoother ride -- key to winning customers on test drives.

General Motors (GM 4.00%) -- which has lagged well behind the leaders in this category -- is arguably making the biggest leap. The current Chevrolet Malibu was all-new just three years ago, but it has lagged well behind cars like the Camry, Accord, and Altima from the start. A refreshed version launched just a year later didn't help much. So instead of trying to give it another makeover, GM is launching another completely all-new Malibu for 2016 -- and it appears to be a much more competitive model.

The upshot: A move that Nissan probably had to make
The extent of the changes to the 2016 Altima might seem surprising. But viewed against the competition, it's not hard to argue that Nissan needed to make a big move here. 

The new 2016 Altima definitely raises Nissan's game in this tough-and-getting-tougher market segment. But whether the changes will be enough to generate sales increases as the overall market for sedans continues to shrink is another question. We'll find out.

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