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Nissan CEO Is Lukewarm on Hybrids

January 30, 2005|Reuters

NEW ORLEANS — The head of Nissan Motor Co., breaking ranks with some of his leading rivals, said Saturday that building fuel-sipping hybrid vehicles makes little sense in today's world because of their high costs.

"They make a nice story, but they're not a good business story yet because the value is lower than their costs," said Nissan Chief Executive Carlos Ghosn.

Nissan will start manufacturing a gas-electric hybrid version of its Altima sedan for the U.S. market in 2006.

But Ghosn said the model was only intended to help Japan's second-largest automaker comply with strict fuel economy and emissions standards.

Nissan will license some technology for the hybrid Altima from Toyota Motor Corp., a world leader in hybrid production along with Honda Motor Co.

The hybrids made by Toyota and Honda are in high demand, but production levels are relatively small.

Toyota plans to nearly double production of its hybrid Prius car for the U.S. market this year, with production totaling about 100,000 vehicles.

Ford Motor Co. is alone among U.S. automakers in producing mass-market hybrid models; Ford recently announced plans to introduce four new models between this year and 2008.

In his speech to the National Automobile Dealers Assn., Ghosn noted that only about 88,000 of the 16.9 million light vehicles sold in the United States last year were hybrids.

He also poured cold water on hydrogen fuel cell vehicles, which many automakers see as the industry's next big technological breakthrough.

"The cost to build one fuel cell car is about $800,000. 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 said.

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