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Nissan, Toyota vie for the hearts of Texans

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Japanese rivals target Lone Star State for growth

There was nothing random about Nissan choosing Dallas as the place to unveil its freshened 2017 Pathfinder crossover this month.

Under a blazing Texas July sun and surrounded by the panorama of Dallas' modern skyline, Nissan North America Chairman Jose Munoz looked beyond the new Pathfinder's roofline to spell out what's on his mind.

"Texas is very important to us," he explained. "Texas is our second-largest market, after California. We have a long history here. Nissan Motor Acceptance is based here in Dallas. We have thousands of employees and their families here. It's important that we continue to do well here. We want to make people aware that we are here and will continue to see good growth in Texas."

As Munoz talked in the broiling midday heat, the word he did not mention was "Toyota."

But Toyota looms as big as a boulder in Nissan's growth strategy -- especially in Texas, and particularly in the Dallas market. Both automakers are zeroing in on Texas as a key growth opportunity.

In the coming months, Toyota Motor Corp. will move about 800 people into temporary buildings here, as it spends $1 billion to create a consolidated North American headquarters campus outside Dallas in Plano. Once fully in place, Toyota will have 4,000 people working at its new Dallas headquarters.

The relocation will additionally bring vendors, marketing services, vehicle parts companies, technical support companies and other related businesses to focus on Toyota.

That project will make Dallas a "Toyota town" in the minds of many.

Munoz doesn't intend to roll over.

Nissan is adding stores in Texas, including Brad Fenton’s new dealership in Rockwall.

"This is a market where we do very well, but we think we can do even better here," Munoz says. "This is our biggest sales region, and it is a good market for pickup trucks. And with our new Titan, I believe we have a very good opportunity for growth."

This fall, Nissan will begin supplying its retailers with a new half-ton Crew Cab version of the redesigned full-size Titan pickup, which the company believes will win market share away from the bigger players in the segment -- from the Detroit 3, but also from Toyota. Toyota's full-size Tundra pickup -- conveniently built in Texas -- outsells the Nissan Titan more than 9-to-1 across the United States.

Munoz -- who was a senior sales executive with Toyota's European operations before being recruited

to Nissan -- wants to change that. And he knows he must make the Titan and Nissan's other light trucks sell in the Lone Star State to close that gap.

So does the man standing next to him in the hot sun, Jim Press.

"This Pathfinder is going to do well for us here," says Press, an iconic figure in the U.S. auto industry. A former co-president of Chrysler and president of Toyota Motor Sales U.S.A., Press is now president of RML Automotive, a $1.4 billion-a-year 26-dealership retail group headquartered in Dallas whose operations include two Dallas-area Nissan stores, as well as a Dallas-area Toyota store. Press knows something about the competition between Nissan and Toyota because he also spent 37 years on the other side of the battle line, working for Toyota.

"Strong and familiar'

Press was president of Toyota Motor Sales when it decided to begin manufacturing the Tundra in Texas. Now, in addition to his role at RML, Press is a consultant to Nissan CEO Carlos Ghosn.

"We have a great history with this vehicle," Press says of Nissan and the crossover, which designers have given a midcycle tweak to look more rugged. "The Pathfinder name is strong and familiar to people. It will do well."

Japan's No. 1 automaker Toyota is in no immediate danger of being outgunned by the No. 2 Japanese automaker. Nissan has been on a steep growth curve under Munoz. For the first six months of this year, Nissan claimed a 9.2 percent U.S. market share, up from an 8.6 percent share in 2015.

Toyota Motor's U.S. market share for the same period fell to 13.9 percent, from 14.4 percent in 2015.

But the volume gap remains sizable: Toyota, Lexus and Scion together sold 399,686 more cars and trucks than Nissan and Infiniti did during the first six months of this year. That sales volume equals the output of two large auto assembly plants. As Texans say, Nissan still has a mighty good ways to go.

Scott Vazin, Toyota's chief spokesman in North America, says Toyota is not too worried about Nissan's growth aims in Texas and around Dallas.

"We are confident with our product portfolio and the performance of our dealers and distributor in the region," says Vazin, a former spokesman for Nissan North America. "It's is a very competitive market, and we wish them luck. They're making big strides with trucks and SUVs, which are big sellers in Texas."

Brad Fenton, on the other hand, is eager to make Toyota sweat.

Brad Fenton’s new Nissan dealership in Rockwall, Texas, near Dallas features 47 service bays.

Big, big, big

On the same day that Nissan unveiled the next Pathfinder in Dallas, Fenton, owner of Fenton Motors in Oklahoma City, invited Munoz and other Nissan executives to cut the ribbon on Fenton's ninth Nissan dealership, in Rockwall, Texas, just outside Dallas.

Nissan has more than 70 dealerships in Texas, and the automaker is adding more. Two of Fenton's

neighboring Dallas dealers are renovating and expanding their stores. Infiniti is also expanding its footprint in the state this year, opening a store in Boerne and another in Lubbock.

Fenton, who has 19 dealerships in Oklahoma, Missouri, Kansas, Tennessee and Texas, spent about $20 million on the open-point Dallas-market store, and it is Texas big.

The dealership is 157,000 square feet under roof, with 47 service bays. It has capacity to take 1,200 vehicles into inventory. It provides customers with TV in the restrooms. The service department offers his-and-hers locker rooms for personal belongings, and showers for employees who want to freshen up after work.

Fenton was eager to make his store stand out from the crowd. As the building took shape, he asked his executive manager, Tim Moody, if there was anything else he wanted, for less than $100,000, that would help distinguish Nissan of Rockwall from the competition. Moody asked for, and got, a radio-frequency identification system that works from cameras installed in the ceiling of the store's multilane service department. As a customer pulls in, the RFID beams the customer's information onto service and sales department monitors so that service managers can greet them by name, and sales personnel can drop by to say hello.

Fenton says Rockwall, a city of 41,000, is a fast-growing and affluent corridor of the Dallas market, and he expects the new store to sell 6,000 vehicles a year once it is up and running.

"I'm not here to compete with other Nissan dealers around town," Fenton says. "I'm here to outsell Toyota of Rockwall and Rockwall Honda. That's my competition. And I believe Mr. Munoz when he says we can do it."

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