Ghosn Prods Nissan Engineering

Advancements in engineering and additional capacity are necessary for Nissan Motor Co. Ltd. to reach the next level, says President and CEO Carlos Ghosn.

The lack of a broad-based engineering force has prompted Nissan to enter a joint venture with Nissan Diesel Co. Ltd. for the development of light trucks. The pair aims to build 60,000 1.1-ton to 2.2-ton trucks annually beginning in 2006 or 2007.

Nissan is funding the bulk of the ¥15 billion ($126.2 million) venture, with an 85% share, while Nissan Diesel is expected to provide the engineering expertise.

Nissan also has established a relationship with Toyota Motor Corp. for the development of advanced-technology fuel cell vehicles.

Ghosn says Nissan has already begun to build up its engineering department, with more than 1,000 new hires this year. But it will take time to educate recent college graduates and to bring hires from outside Nissan up to speed with the company's methods.

With a 19.5% return on investment capital, one of the highest rates in the industry, Nissan will be able to afford the changes ahead. Says Ghosn: “We need capacity. We need engineering power. Cash is not a problem.”