Restyling Nissan

When Kathy Vogel started shopping for a car recently, she figured she'd go for basic black--a professional look that suited her career as a corporate attorney. But during a visit to her parents in Cleveland, she saw a new "solar yellow'' Xterra SUV at a Nissan dealership. "It was 'Wow, gotta have it','' says Vogel, who says she draws a lot of looks these days tooling around in her Xterra on the streets near her home in Pittsburgh.

Come again? A gotta-have-it Nissan? This, after all, is an automaker that mastered the art of bland jelly-bean car styling with forgettable models like the Altima and Sentra, and was in such poor financial shape recently that it had to put itself on the auction block. But the surprising success of the distinctive Xterra, which looks like a backpack on wheels, has sparked the beginnings of a turnaround at Nissan. And whether it accelerates will depend largely on the efforts of Shiro Nakamura, a 50-year-old Japanese designer who is a newcomer to Nissan. This recruit from rival Isuzu will be rolling out no fewer than 22 new models over the next three years, including the widely anticipated new Z sports car that will be unveiled next week at the Detroit Auto Show. It's the kind of bet-the-company shift in design that paid off for Chrysler in the early 1990s, and for Volkswagen a few years ago. Nakamura has even greater ambitions: he wants to transform the reputation of Japanese car designers from master copycats to trendsetters. "As long as you think you are not leading the world, you copy,'' says Nakamura. "We have to change our attitude.''

The fact that Nissan even has a shot at reversing its skidding fortunes is remarkable enough. This company, which once competed head-to-head with powerhouse Toyota, saw its yearly sales in the United States drop 20 percent from 1994 to 1998 (when its sales of about 621,000 units constituted 4 percent of the U.S. auto market). For years the Japanese parent has hemorrhaged red ink and struggled with a debt burden big enough to crush a Hummer. Renault came to the rescue last year, paying $5.4 billion for a 37 percent stake, and immediately installed Brazilian-born Carlos Ghosn (rhymes with "stone") to overhaul the company. Nicknamed "Le Cost Killer'' for his slashing ways at Renault, Ghosn has embarked on a multitasker's makeover at Nissan, closing plants in Japan, breaking ground on a new $1 billion factory in Mississippi, and ripping up long-term supplier contracts, all with the aim of cutting costs while boosting profits and sales. That's no easy feat in a slowing auto market, but not impossible: the Xterra helped boost Nissan's U.S. sales by about 12 percent through November of last year.

Ghosn has often said Nissan's biggest problem is its conservative design. He has publicly stated that Nakamura's mission is "to bring back to Nissan car design the attractiveness and consistency it urgently needs.'' That strategy could pay off, says Wes Brown, an industry consultant with Nextrend in Thousand Oaks, Calif. "Honda and Toyota are very conservatively styled vehicles without much design pizzazz,'' Brown says. "That provides a perfect opportunity for Nakamura to break apart from the pack.''

Nakamura certainly has the international flair Nissan needs. The Osaka native has worked in GM's design studios and in Europe for Isuzu. He speaks fluent English, is a sharp dresser and plays jazz with friends about once a month in a small club. Colleagues say he is candid and straightforward. "What surprised us most,'' says Nissan executive vice president Patrick Pelata, "was that he is more Latin than Japanese in his way of communicating.'' Nakamura can work a crowd, too. When he dined with a group of Z-car enthusiasts in Las Vegas last June during their annual convention, he passed around illustrations depicting a sliver of rear tire, a bit of fender and a gas cap--the first sneak peek at the new Z. "It was a tease, but enough to whet our appetites,'' says Mike Taylor, a Texan who organized the gathering. "Everyone at the convention went crazy.''

In the Nissan alphabet, Z is the first and most important letter. Nakamura will have the spotlight to show what he can do with the unveiling of Nissan's new Z next week. The original 240Z, introduced in 1970, was perhaps the company's greatest coup in the United States--this poor man's Jaguar won a devoted following, and Nissan sold more than 1 million Z's before the most recent version, the 300ZX, was retired in 1996. Nakamura wants the new Z, which will go into production in 2002, to jump-start 21st-century car design and help revive Nissan's sales. Says auto consultant Michael Robinet of CSM Worldwide in Farmington Hills, Mich.: "You need a halo car like that to lead your comeback.''