Nissan plans to unveil a facelifted full-size Titan pickup truck during next month's Chicago Auto Show, company insiders have confirmed.

The unveiling comes at a critical time for Nissan, which lost market share last year, and is now facing a new challenge in the pickup segment from Toyota, which is determined to boost sales of its new full-size Tundra pickup truck.

Pickup trucks remain critical to both American and Japanese automakers because they provide healthy profits, even though discounting and rebates in the segment have been increasing.

Meanwhile,Toyota hopes to push the Tundra's sales to 200,000 units this year as production ramps up at the Japanese auto giant's new assembly plant in San Antonio, Texas. The Tundra marketing blitz is set to kick off about the same time as the Nissan unveils the Titan in Chicago.

With sales in the pickup segment flat, most observers expect any increase in Tundra sales to come out of truck sales at Ford, General Motors, and the Chrysler Group, which have traditionally dominated the segment. However, several analysts believe Nissan is vulnerable because it doesn't command the kind of customer loyalty enjoyed by the domestic brands.

David Cole of the Center for Automotive Research in Ann Arbor, Mich., says Nissan clearly faces some distinct competitive challenges in the truck segments where not only is Toyota is gaining strength but where the domestics remain very strong.

In addition, Toyota is expected to target Nissan's truck customers initially because they are considered approachable and are concentrated in the urban markets in the Southeast and the West Coast, where Toyota's marketing and dealer network are the strongest. GM and Ford have maintained rural dealerships that have been critical in helping both companies lock up more than two-thirds of the market for full-sized pickup trucks.

Meanwhile, sales of the Titan have never quite lived up to expectations. Nissan executives suggest that the hefty marketing budgets deployed by companies such as GM and Ford have limited Nissan's ability to establish a beachhead in the full-size segment.

Dominique Thormann, vice president of administration for Nissan of the Americas , said the Japanese automaker was prepared for the challenge and believed it was prepared to bolster its sales in the full-sized segment despite the new challenges.

Cole said that the GM-Toyota contest for sales leadership, which will come to a head this year, could lead to a re-alignment across the entire industry. “When the top two guys fight it out, it has consequences for everybody else,” said Cole. GM already has reduced cost of building a new car by more than $2000 per vehicle during 2006 thanks to changes to its contract with the United Auto Workers and efforts to trim material costs. GM also has reduced its incentives and cut back on sales to rental fleets, Cole said.