Nissan Hopes To Juke Its Way Into Millennials' Driveways

Nissan Hopes To Juke Its Way Into Millennials' Driveways

By Michelle Krebs June 9, 2010

It looks like a sort of hybrid mythological beast to some car buffs, sinisterly reptilian to others, based on comments posted on Edmunds.com forums.

It has huge, 17-inch wheels but just a 1.6-liter engine. It's aimed at a generation of 20-something men who, studies suggest, just aren't that into cars.

So when the Nissan Juke arrives in U.S. showrooms in October, it'll likely spark as many conversations as the rest of the company's new crop of interesting small cars, including the Nissan Cube and the upcoming Nissan Leaf all-electric vehicle.

But will the quirky Juke attract a lot of actual buyers? Or will it just be another reminder that Nissan sure is willing to make weird cars?

"No one has done a product quite like this before: the best elements of a sports car and the best elements of a crossover vehicle," said Chris Woodruff, Juke brand manager. "I think the whole industry will be moving in this direction."

Nissan executives believe the Juke's bipartite design, combined with the pull of an under-$20,000 price tag, will appeal to American consumers.

And some observers agree that the Juke's unapologetic uniqueness will help Nissan establish leadership in the relatively under-populated smaller end of what insiders call the "B" segment of the business -- basically, subcompact vehicles. (In this construct, there's really no significant "A" segment.)

"If you study auto history, you see that the company that gets first to an important segment -- if they execute the first vehicle reasonably well, which Nissan has done here -- is likely to have a big share of the segment for a long time," said John Wolkonowicz, senior automotive analyst for IHS Global Insight, in Lexington, Massachusetts. "If they stick it out, it'll pay off for them."

Growing Segment

Built on the same mechanical platform as the Cube and Nissan Versa, the Juke was designed mainly in Europe and Asia -- and mainly for those markets. Nissan executives told Edmunds' InsideLine.com, which recently posted its first drive of the vehicle, that they hope to sell as many as 100,000 Jukes a year in Europe; they forecast selling about 25,000-30,000 in the U.S. But they expect sales to be "incremental" -- additional -- to Nissan's existing business in this country, at a level that would be double the unit sales for the automaker's signature Nissan 370Z sports car.

There's definitely an opportunity to do business in the swath of the market Juke addresses. Sales in the B segment -- including the Chevrolet Aveo, Toyota Yaris, Honda Fit and Nissan's Versa as well as Cube, in addition to the just-introduced Ford Fiesta -- were about 1 percent of overall U.S. auto sales in 2004, said George Pipas, Ford's head of U.S. industry analysis.

But by 2009 the category had grown to 4 percent of the market, helped along by a range of factors that included tremendous affordability during the Great Recession and great fuel economy in the wake of $4-a-gallon gasoline in 2008. And analysts see further growth in the share of B-segment sales compared with the industry as a whole.

"Within a few years, as gasoline prices go up again and [fuel-economy] regulations become more significant, the segment that Juke represents will become a very important segment in the industry," Wolkonowicz said. "[Juke] may not get off to a blazing start, but it's a vehicle that Nissan should stick with."

Pipas believes the continued acceleration of urbanization in the U.S., as around the world, is another factor favoring entries such as the Juke and Fiesta. "Parking increasingly will be an issue, and the lower costs of operation of these cars will help," he said.

Calling Young Men

Another reason for bullish expectations for small subcompacts such as the Juke is they're being executed at significantly higher levels of quality and loaded with better amenities than ever.

For example, the Juke's engine is small but it's a direct-injection, turbocharged power plant coupled with all-wheel drive. And there's a nifty, high-tech feature called I-CON, which functions in one setting as a controller for the automatic climate-control system -- and in another as a drive-mode selector offering normal, "sport" and "eco" settings. The control itself changes colors and functions.

All told, the new car is aimed decidedly at young men. That's one big reason Nissan doesn't expect Juke to cannibalize much the sales of Rogue, its existing small CUV, about three-fifths of whose buyers are women. Besides, Juke is significantly smaller than Rogue.

Unique Appeal

How small? The Juke is even smaller than the Cube, the ranking Nissan entry in tininess. The Juke has a 99-inch wheelbase like Cube, but is shorter in stature by 3 inches. Total interior volume is only 97 cubic feet compared with 109 cubic feet in Cube. So although Nissan is positioning the Juke as "half-CUV," the practical reality is its low ceiling will make it much smaller than the Cube both in actuality and perception.

No matter, Woodruff said. Other design elements will help Juke capture its share of buyers in the millennial cohort.

"The bottom is very robust and masculine, with big wheel arches and tires, and with a big gap between the tire and wheel arch," he said. "But the top is like a sports car, with a sloping roof line, a compact canopy and a high beltline."

Neither is Woodruff bothered by the increasing talk in the industry about how the millennial generation displays much less enthusiasm for vehicles in general than did boomers or even Generation X. This quantified lack of enthusiasm is blamed on factors ranging from a preoccupation with digital-communications devices instead of cars, to the relative lack of independence of millennials compared with previous generations.

"Young people today are as much interested in technology like iPods as they are cars," Woodruff conceded. "But if you look at the demographics, just the sheer number of millennials" -- at about 65 million, twice as large as the GenX cohort -- "will provide enough who want to ride and drive cars. So we don't see a major impact on sales." 

But the cars and technogy outside the car are not mutually exclusive. Says Edmunds.com Industry Analyst David Greene, who is borderline Gen X and Gen Y: "Juke sales will hinge on Nissan's ability to sell the vehicle's technology to millennials -- a marketing approach that Nissan had limited success with during the Cube launch but can build on that experience." -- Dale Buss, Contributing Writer; InsideLine Senior Editor Erin Riches contributed to reporting on this story

Photos by Nissan

1 - The Nissan Juke goes on sale in the U.S. this fall.

2 - The Nissan Juke is powered by a small turbocharged engine.

3 - The Nissan Juke is smaller than the Nissan Cube. 

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.