At under $10,000, Versa is a bargain few want

Dan Carney • E-mail

“So, does the Cheapest Car in America have a glove compartment?” asked my kids, with the requisite snorts and eye rolls. In disgust, they had stopped referring to the Nissan Versa 1.6 by its given name, instead preferring their new nickname for it.

At its introduction last fall, the $9,990 no-frills Nissan undercut all other new cars in the United States. (Since then, a reduction in the price of the Hyundai Accent has outdone that dubious distinction by $20.)

Despite its bargain-basement price, the Versa is surprisingly pleasant to drive and seems solidly built, suggesting that for consumers looking for the cheapest entry to new car ownership, with its attendant warranty and the reasonable expectation of trouble-free ownership, the Versa is a top choice.

Here’s the trouble though: Consumers don't just shop for reliable transportation — not even in a recession that has chilled consumer purchases like summer movie matinee air conditioning.

Consumers have a vice grip on their pennies these days, and so one might expect the Versa 1.6 to be a hot seller. Instead, like my tween-agers, consumers are aghast at the Versa’s absent gadgets. If they do buy a Versa, it’s almost certainly one of the costlier, better-equipped models whose prices fall more in line with those of other subcompact models.

Nissan sells about 85,000 Versas a year, but only about 10,000 are the affordable 1.6 sedan, reports Albert Castignetti, vice president and general manager of the Nissan division. And of those 10,000 cars, 90 percent are the $10,990 version with air conditioning, leaving just 1,000 Versas per year that sell in the $9,990 configuration.

Most shoppers conclude they really want that air conditioning and a stereo, Castignetti said. People who end up buying the low-end Versas are generally shoppers who had been looking at used cars, he said.

“People are saying, ‘This is available at a used car price with a new car warranty and reliability,’” he said.

As for whether Nissan will be able to maintain its attractive sub-$10,000 price once the federal government mandates electronic stability control for the 2012 model year, Castignetti is hopeful.

“It has been a good story for us, and we are going to maintain that story,” he said.

So if the sub-$10,000 car draws little interest among buyers, what are the prospects of the  micro-priced Tata Nano, which debuted for $2,500 this year in India? For one thing, if it ever reaches U.S. shores, you can bet it will cost a lot more here.

“If they sell the Nano here, it will be more like $8,000,” predicted James Bell, editor and publisher of Intellichoice.com. “That thing as it sits right now would never pass our crash, or customer expectation, standards,” he added.

That was also the conclusion of Carlos Ghosn, president and CEO of both Nissan and Renault, when asked about Nano sales in developed countries at the time of its debut. His preference, he said, was to offer stripped-down versions of existing models, which wouldn’t cost much more, but which would provide more of the space and safety such customers expect, he said.

Tiny, tinny cars like the Nano are doomed to become the punch line of jokes, much like the communist-era Fiat-knock-offs from the then-Yugoslavia. Remember the jokes about the Yugo? How do you double the value of a Yugo?  Fill the gas tank.

Intellichoice.com’s Bell is already testing his material.

“To sell the Nano here, Tata would have to add some options … like a second windshield wiper,” he quipped.

The trouble is that while consumers say they would like a $2,500 car (remember, the ill-regarded Yugo cost $3,995 in 1986), what they really mean is that they would like to pay $2,500 for a new car very much like the one currently their driveway (which is not what they would get, and which is why they wouldn’t buy such cars anyway).

Take a look at the sub-$10,000 version of the Versa. It's not just that it has no radio and no air conditioning. There are no power windows. No power door locks. You’ll need my 35-inch shirt sleeve length if you want to adjust both outside mirrors from the driver’s seat, because the only way to do it is to roll down the windows using their cranks, and push on the mirrors.

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