Diesel X-TRAIL under local evaluation

The short answers is -- maybe. What's certain is despite the fact Nissan Australia has already officially said no to the new highly efficient and powerful X-TRAIL turbodiesel models available in other markets, the company is re-evaluating the decision.

According to Nissan spokesman Ross Booth, the company is yet to be convinced the Australian market would support an X-TRAIL diesel, however, the strength of consumer response has prompted the rethink.

"We were surprised at the number of e-mails and how strongly people felt about this issue," Booth said. "But there are no precedents for a volume-selling SUV diesel entry in this market.

"Normally, you would peg down why you would want a diesel and what you would want to pay for it in terms of fuel savings. When you are basing such a comparison on a petrol model that is already fairly economical and powerful [the new X-TRAIL petrol CVT auto delivers a 9.3lt/100km combined fuel figure] the price premium for a diesel takes longer to recover than in a larger model."

Booth said that a $3000 premium for an equivalent diesel model was generally regarded as the absolute maximum consumers will accept. "Even that might be too high for a vehicle with the X-TRAIL's $31,990 entry price," he said.

However, he did acknowledge that there might now be an emotional or green component in the switch to diesel that wasn't evident in the market until recently.

Nissan may also have contributed to this shift especially among its own buyers when sales of its current Navara D40 and Patrol light commercials, Pathfinder and Patrol 4x4 wagon models are predominantly diesel.

Booth also noted that the performance and economy of diesel engines had changed dramatically since the 2006 introduction of low sulphur fuels in Australia, opening the door for new common rail technology.

Nissan's business case study for the X-TRAIL diesel is currently underway and has to quantify these factors in dollar terms.

Booth said: "Even if we do find there is a strong market for the X-TRAIL diesel, we then have to assess how much will be incremental sales or how much will be substitutional".

Indeed, this is the million dollar question for Nissan: will an X-TRAIL diesel boost overall volumes or will it cause existing petrol buyers to simply swap over to the diesel model?

As the number of rival entries in the compact SUV segment continues to grow, Booth admitted that the consideration that would swing the final assessment in favour of an X-TRAIL diesel was the need to maintain volumes in such a competitive market.

Because Nissan does not have a larger petrol engine version of the X-TRAIL to counter Toyota's powerful new V6 petrol version of the RAV4 and others, a diesel X-TRAIL would be the only option if the compact SUV market moved in this direction.

However, Booth wondered whether there was a major market for a $50,000 RAV4: "There is no way we could sell a $50,000 X-TRAIL in any volume."

If Nissan's latest study reached the conclusion that a diesel X-TRAIL would be desirable, Booth's job would only get harder from that point.

Currently, the new X-TRAIL is available in Europe with a 2.0-litre turbocharged diesel in two distinct versions. The six-speed manual version generates 130kW/360Nm for a desirable combination of power and torque. The same engine has to be detuned to 113kW/320Nm to match the capacity of the six-speed automatic transmission.

In Europe, this is consistent with buyer perception that a powerful manual diesel is the top drivetrain option while the auto is the soft option. In Australia, that positioning is reversed.

This would make the pricing and positioning of these two X-TRAIL diesel drivetrains in the local context difficult when their power and torque differences are so pronounced. The expedient solution would be to offer only the automatic version yet the manual X-TRAIL models are an important component of the local model's image of extra toughness.

Booth's final remarks on the issue were revealing:

"Whichever way you look at it, a diesel X-TRAIL is not a simple issue. However, we are now looking at it more seriously in a time frame that will be as short as possible."

Nissan Australia CEO and Managing Director Shinya Hannya confirmed that if a clear business case (which will also involve negotiations with Japan) emerged from this latest study, "We will act on it immediately."