The second generation was introduced in 1996 with more rounded styling. The second generation Pathfinder was completely redesigned from the first generation, switching from body on frame construction to unibody construction. The engine was upgraded to the VG33E, with 168 hp (125 kW) and 196 lb·ft (266 N·m) torque. For the 1999½ model year, the Pathfinder was freshened. 2001 brought a new 240 hp (179 kW) V6 engine, the VQ35DE. With its facelift, the Pathfinder also grew in size, making way for the compact Xterra. Diesel engines continued to be used in Japanese and European models. As of the 2002 model year, the Terrano / Pathfinder is no longer sold in Japan, and is currently available in North America, Europe and the Middle East. Nissan has issued a TSBS (Technical Service Bulletin) on the issue (NTB908-001, NTB098-012), but has not dealt with it as a recall. It is an expensive fix ($700-1,400) repair due to faulty control arm bushings. A Polyurethane after-market bushing replacement is suggested over the OEM part (since it is faulty). Their TSB website says: "If a 1996-98 Pathfinder exhibits the following conditions, the cause may be from worn bushing(s) in the rear suspension upper and/or lower links. Excessive play in the rear axle especially during moderate acceleration or deceleration. Vehicle pulling at a constant speed. Excessive sway and rocking motion in the front suspension when coming to a stop. To correct these conditions, use the service procedure on page 2". Many customers have complained of this issue happening at highway speeds 55 mph+ which causes the vehicle to sway back and forth dangerously. NTSB "complaint" board has numerous owners that have complained about the problem but Nissan has not addressed the design flaw or issued notices or recalls to the owners. The Pathfinder was given a face lift in 2001 with a new front fascia two grille variants, rear fascia, and interior. Another face lift occurred in 2002, when the current Nissan logo was added and received a bolder grille versus the 2000 model, as well as a new steering wheel and radio display.
At the 2004 North American International Auto Show, Nissan unveiled a completely redesigned Pathfinder for the 2005 model year. The new R51 Pathfinder uses the Nissan F-Alpha platform, and is powered by a 4.0 L V6 engine VQ40DE (266 hp (198 kW), 288 lb·ft (390 N·m)) or a 2.5 L YD25DDTi (174 hp (130 kW), 297 lb·ft (403 N·m)) Turbo Diesel. In late 2003, a full-size SUV, the Pathfinder Armada, debuted. Although they share a common name, they have little similarity and use different platforms. The "Pathfinder" prefix was dropped for 2005, leaving just the name "Armada". The Pathfinder is sold as the Terrano in many markets outside of North America. In 2005, when the redesigned Pathfinder was released the Pathfinder name became international as it sold worldwide. These were the first to be sold in the UK. The 2005 model introduced a third row of seats to the Pathfinder line for the first time. It has been subject to a class action lawsuit because of repeated coolant leaks that permanently damage the transmission. The facelifted 2008 Nissan Pathfinder debuted at the 2007 Chicago Auto Show, and added new models with a V8 engine from the related Nissan Titan. An updated version debuted at the Geneva Motor Show in 2010. Now available with a Nissan 3.0-litre V6 Turbodiesel (V9X Engine) producing 240 hp (175 kW),406 ft·lbf (500 Nm) @ 2,500 rpm while an upgrade YD25DDTi Turbodiesel power rises to 140 kW (190 PS) – up 14 kW (19 PS) – while torque increases by a healthy 47 Nm to 450 Nm. Over the combined cycle manual versions use 8.4 L/100km – an improvement of 1.4 L/100km – while CO2 emissions have fallen by 40g/km to 224 g/km. Both figures are class competitive. A version of the engine with a diesel particulate filter (DPF) is also available in certain markets. Exterior changes. The revised models have been given a new look front and rear to differentiate them from their predecessors. Changes at the front include a new bonnet, revised grille and a new bumper assembly. Adding 80 mm to the length of both models, the bumper is more rounded and lends a more sporting touch to the cars. A new headlamp design with projectors is offered for Xenon lamps. Headlamps washers now pop up from beneath body colour moulding in the bumpers. A new 18-inch (460 mm) alloy wheel complements the existing range of 16 inch (steel and alloy) and 17 inch (alloy) designs. V6 models are given a discreet V6 badge at the leading edge of both front doors and a new side moulding across the doors.