Nissan Motor head Carlos Ghosn, breaking ranks with some of his leading rivals, reportedly said on Saturday that building fuel-sipping hybrid vehicles makes little sense in today’s world because of their high costs.
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“They make a nice story, but they’re not a good business story yet because the value is lower than their costs,” the Nissan chief executive said, according to Reuters, which noted that Nissan will, in fact, start manufacturing a petrol-electric hybrid version of its Altima sedan for the US market in 2006.
But Ghosn reportedly said the model was only intended to help Nissan comply with strict fuel economy and emissions standards in states like California, not because he expects it to be a money-maker.
Nissan reportedly will license some technology for the hybrid Altima from Toyota, which is the world leader in hybrid production along with Honda.
Reuters said the hybrids made by Toyota and Honda are in high demand, but production levels are still relatively small.
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By GlobalDataThe news agency said Toyota plans to nearly double production of its hybrid Prius car for the US market this year, with production totaling some 100,000 vehicles, while Ford is alone among US automakers in producing mass-market hybrid models – it recently announced plans to introduce four new models between this year and 2008.
Ghosn’s comments, which are likely to draw criticism from environmental groups, came in an address to the National Automobile Dealers Association, which opened its annual convention in New Orleans on Saturday, Reuters said.
In his speech, Ghosn reportedly noted that only about 88,000 of the 16.9 million light vehicles sold in the United States last year were hybrids, adding that they are still considered “niche” products and something way outside the automotive mainstream.
He also poured cold water on hydrogen fuel cell vehicles, which many automakers see as the industry’s next big technological breakthrough, the report added.
“The cost to build one fuel cell car is about $US800,000. Do the math and you figure out that we will have to reduce the cost of that car by more than 95% in order to gain widespread marketplace acceptance,” Ghosn reportedly said.
Reuters noted that Ghosn, who is credited with a dramatic turnaround at Nissan, is poised to take over as chief executive at France’s Renault SA in May, a future role, simultaneously running operations at two major automakers, that is thought to be an industry first.
Nissan – owned 44% by Renault — scored the biggest sales jump of any major car maker in the United States last year, with a 24% surge to 986,000 vehicles, the report added.
