Don't panic just yet. The future of the Xterra is in doubt because of the upcoming redesign of the full sized Titan and the demise of the current F Alpha architecture that underpins it.
In North America, the F Alpha platform is the basis for the Titan, Armada, Xterra, Pathfinder, Frontier, Infinity QX56 and the Suzuki Equator. It also underpins several variants of these vehicles in other markets.
Originally, Nissan was under agreement to have Chrysler build the replacement for the Titan. It was thought that this would be a largely badge engineered Chrysler product spelling the end of the F Alpha platform by 2012. However, the agreement fell through forcing Nissan to take the Titan replacement back in house while delaying it at least a year. So now we are expecting a replacement for the Titan in the 2013-2014 time frame. This means the continued use of the F Alpha platform until that time, negating the need to discontinue the Xterra.
So expect the Xterra to remain in production for a couple more years with only slight redesigns.
However, with the replacement of the F Alpha platform, a next generation Xterra will need a new architecture. The thought is that the mid sized SUV's like the Pathfinder will get a unique (and potentially car based) unibody architecture to meet more stringent fuel economy requirements.
The Frontier will likely continue past 2013 but the Xterra may not. The Xterra is the slowest selling truck/SUV this month, but runs neck and neck with the Pathfinder and Armada for YTD sales. Only the GTR, 370Z and Cube sell in smaller numbers. But they still sell twice as many Xterras as 370Z's in the US. So the jury is still out. My guess is that if they can find an economical way to leverage the new truck platform, they'll have a next gen Xterra.
-Old Army