Fueled by steady growth in sales and earnings since the start of the decade, Japanese auto makers are pouring record sums of money into research and development. In this second installment of a 4-part series, Ward’s discusses trends with Nissan’s advanced technology chief, Senior Vice President Minoru Shinohara.

ATSUGI, Japan – Safety is much on the mind of Minoru Shinohara, who heads up advanced technology development for Nissan Motor Co. Ltd.

In an interview with Ward’s here, Shinohara says Nissan is leading the safety technology movement, pointing to such devices as the auto maker’s new Around View Monitor – an industry first – that was introduced in October in Japan on the Elgrand van. That device, coupled with the auto maker’s other developments in both onboard and infrastructure technology, is part of an effort aimed at eliminating traffic fatalities, Shinohara says.

Meanwhile, Nissan is working on a number of solutions to improving fuel economy, including its own hybrid-electric powertrain slated to hit the market “around 2010,” he says.

As head of advanced technology, Shinohara, 55, oversees more than 1,000 scientists and engineers at the auto maker’s new advanced-technology center in Atsugi. Globally, Nissan employs 13,000 in research and development, including 10,000 in Japan. Here are excerpts from the interview:

Ward’s: Please outline Nissan’s telematics strategy.

Shinohara: Our strategy is closely linked to safety and the environment.Telematics also affects comfort and entertainment, but the primary focus for Nissan is on improving safety and the environment, notably on achieving zero accidents and on reducing CO2.

We are taking a 3-tiered approach. The vehicle remains the focal point of our activities, but we must also work on improving infrastructure and raising safety awareness.

Ward’s: What are some of the highlights of Nissan’s safety activities?

Shinohara: Nissan’s in-vehicle technologies are summed up in what we call “safety shield” – that is, technologies designed to avoid crashes or, in the event of a crash, to protect occupants from serious injury. On the infrastructure side, we pioneered the SKY project. (Centered west of Tokyo in Kanagawapp prefecture, the SKY project [standing for Start ITS from Kanagawa, Yokohama] brings Nissan together with key telematics suppliers, infrastructure providers and local governments to develop a future traffic safety system that, among other things, will help reduce accidents at intersections and alert drivers of hazardous road conditions.)

Ward’s: What are Nissan’s safety targets in terms of lives saved?

Shinohara: Our midterm goal, which we hope to achieve by 2015, is to reduce fatalities and serious injuries by 50% from 1995 levels. Our final goal is to approach zero. We haven’t set a time frame for that, but we believe the 50% target is reachable.

Ward’s: Is this a Japan or global target for Nissan?

Shinohara: Global. Numerical targets for each market differ, but a 50% reduction is our overall goal. We also mustn’t forget emerging auto markets such as China and India.

Ward’s: How do you rate Japanese car makers against their European or American counterparts in advanced safety technology?

Shinohara: In advanced safety such as crash avoidance, essentially in areas that use sensors and actuators, Japanese car makers are ahead.

Ward’s: In your opinion, is Nissan a leader in any of these technologies?

Shinohara: We believe so. For instance, our lane-departure prevention system with independent brake control is a world first. So is our “Magic Bumper” system, which we’ve renamed “distance control assist” (to bow on the Fuga in Japan by year’s end and the Infiniti EX35 in the U.S.). The system helps control the distance between the (driver’s) car and the car in front. When the vehicle gets too close to the car in front, the accelerator pedal automatically disengages. Lastly, we believe our Around View Monitor (introduced in October on the Elgrand in Japan) is an industry first.

Ward’s: But haven’t your competitors, in particular Honda (Motor Co. Ltd.) and Toyota (Motor Corp.) also introduced some of these systems?

Shinohara: No one has introduced a lane-departure prevention system. Lane-departure warning? Yes. And although Toyota has several similar systems, we think ours are more advanced.

Ward’s: What about VDIM (or vehicle dynamics integrated management), Toyota’s advanced stability control system? Toyota has introduced VDIM on upper-grade models both in its Toyota and Lexus lineups. Has Nissan introduced such a system yet?

Shinohara: Nissan has a similar technology. We also introduced 4-wheel “active” steering on the Skyline (in Japan) and G35 sedan and G37 coupe in the U.S. We believe this is also a world first.

Ward’s: In addition to 4-wheel active steering, are any of these systems available overseas?

Shinohara: Generally, we introduce them first in Japan. That said, we have introduced lane-departure warning in the U.S. in our Infiniti lineup (on the FX, M, and EX) and will soon introduce lane-departure prevention (on the EX). Other systems (available include): adaptive front lighting and intelligent brake assist with pre-crash pretensioner seatbelts (on Infiniti M and G series models).

One system not yet introduced in the U.S. is intelligent cruise control with low-speed following capability. That system is still only available on the Fuga and Skyline in Japan.

Ward’s: Does the U.S. market cause you any concern because of the risk of product liability lawsuits?

Shinohara: This is a driver-support system. The driver is still in control. So no, we don’t anticipate problems.

Ward’s: Do you see Japan as a sort of test market for these new safety technologies in part due to a friendly regulatory environment?

Shinohara: It is true that the Japanese government has been supportive and changes standards if it thinks the technologies are reasonable. But more than that, I think Japanese consumers like new gadgets and toys. In this sense, U.S. customers are more practical. Something new can be sold more easily in Japan.

Ward’s: Switching gears, when will Nissan introduce its own hybrid?

Shinohara: Around 2010.

Ward’s: For hybrids to come into the mainstream, to what level must total system cost, including the battery pack, be lowered – $500? (Toyota’s current Prius system is estimated to cost about $2,500; the target for the next-generation model, reportedly to be launched in 2009, is $1,250).

Shinohara: That would be interesting. But (reducing costs) more than $1,000 would be difficult. If consumers become more concerned about global warming and CO2, then price might become less of a factor.

Ward’s: What about diesels, which currently have an estimated $500 cost disadvantage relative to gasoline powerplants? What trends do you see in the coming five to 10 years?

Shinohara: Depending on new stricter emission standards, which will certainly require greater usage of aftertreatment systems, costs could go up considerably.

Ward’s: What is the outlook for fuel-cell vehicles?

Shinohara: From a technical standpoint, we have almost matched gasoline cars in acceleration, driving distance and quietness. Still, we need to reduce system size and, of course, cost. Bringing down costs continues to be the fundamental issue facing all car makers. There is also still no (hydrogen fueling) infrastructure.

Infrastructure is like a chicken and egg. Auto makers are waiting for infrastructure. The infrastructure side says that auto makers won’t commit to introducing fuel-cell vehicles.

But honestly speaking, we (auto makers) have made significant advances. That said, I don’t envision real market (penetration) until after 2020 or 2030 and even 2050. Internal-combustion engines will still hold a more than 50% share.

Ward’s: What is the current situation with Nissan’s lithium-ion battery program? (In April, Nissan entered into a joint venture with NEC Corp. and NEC Tokin Corp., an NEC subsidiary, to develop and manufacture Li-ion batteries for automotive use by 2009. The companies plan to invest $4.3 million in the venture, which is named Automotive Energy Supply Corp. At the recent Tokyo Motor Show, Nissan CEO Carlos Ghosn said the auto maker is looking to possibly begin production of a mini electric vehicle early in the next decade.)

Shinohara: We’ve been working on lithium batteries for 15 years. We plan to commercialize one for use in our next-generation hybrid in 2010.

Ward’s: What potential do you see for plug-in hybrids?

Shinohara: All car makers are evaluating plug-in hybrids. However, we can’t say when we will produce one, but probably between 2010 and 2015 in small volumes.

Nissan’s position is that there is no single technology to meet future environmental needs. We think diesels are necessary, hybrids are necessary and EVs are necessary. We must do everything well. (And despite its advocacy of hybrids), Toyota doesn’t just do hybrids.

Ward’s: What place does ethanol have in your future product strategy?

Shinohara: At present, all Nissan cars can run on E10 or 10% ethanol (in a mix with gasoline). In the U.S., we introduced an E85 or 85% ethanol version of the Titan and Armada (fullsize) trucks in 2006 and 2007. In the next couple of years, we will introduce a 100% ethanol vehicle in Brazil.

Biofuels are attractive because they can be used with standard (internal combustion) engines. However, fuel cost remains a problem. In addition, there is a potential problem, especially with ethanol, of competing with food resources, notably sugar and corn, two major ethanol sources.

So, at this point in time, it is not clear which way the industry will turn. As I said, we have already converted all of our cars to E10. We can achieve E85 and even E100 if we wish, although E100 will require further (engine) modification. But it won’t be as difficult as introducing a plug-in hybrid or fuel-cell vehicle.

Our main concerns with biofuels are availability and cost.