No mini Nissans

Nissan Motors has no plan to produce minicars as long as it has a steady contract with an original equipment manufacturer, Nissan CEO Carlos Ghosn says.

"As long as we can have a solid contract with an OEM...as long as we have a reliable contract and we can have products of good quality and that are competitive, we are not thinking about developing minicars by ourselves," Ghosn said in an interview in Tokyo.

Nissan, Japan's second biggest automaker, currently has minicar OEM contracts with Suzuki Motor Corp. and Mitsubishi Motors Corp.

On whether Nissan will form a capital tie-up with Suzuki, Ghosn said the possibility is not part of the two automakers' agenda.

"It is mainly specific collaboration," he said, referring to Nissan's current business alliance with Suzuki in the fast-growing Indian market.

High gasoline prices have been pushing sales of fuel-efficient minicars with engine capacities up to 660cc in Japan.

In the April-September first half of this fiscal year, domestic sales of minicars increased to a record 961,721 units, up 4.9 per cent from a year earlier, while the total industry volume decreased by 3.4 per cent.

During the same period, the number of newly registered vehicles in Japan excluding minicars fell 7.5 per cent to 1.74 million units, the lowest for the first half since 1977.

Nissan's first-half domestic sales, as well as production, were hit hard by this trend change in the market.

Asked whether Nissan is considering restructuring its domestic plants on the back of sluggish sales, Ghosn said there is no such plan as "Japan is still a competitive base for production".

Ghosn said he does not think that weak demand for cars in the country will continue eternally, adding, "Japanese plants are not only for the Japanese market, but also for exports."

"There is a need and there would be a need for a new plant" in North America, but as long as Japanese plants or elsewhere have enough production capacity, the automaker will not set up a new production site.

With regard to advanced technologies designed to meet stricter environmental regulations in the world, Ghosn said Nissan is "not pushing one technology, contrary to some of our competitors."

Instead of pursuing such technology as hybrid solely, he said that Nissan, through an alliance with Renault, is exploring a wide range of options in marketing new models, including those equipped with improved diesel engines, bio-ethanol engines, or fuel cells.

Each regional market may go in a different direction as there are differences in environmental rules, energy dependence and consumer needs, Ghosn said, citing the popularity of diesel engines in Europe and bio-ethanol technology in Brazil.

Source: AAP 2006