Nissan Looks Forward to Electrifying 2010

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State of the Industry: North America

LOS ANGELES – Nissan Motor Co. Ltd. in 2010 will launch several new and improved vehicles, including next generations of the Quest minivan and Infiniti QX SUV and M sedan.

But its primary focus is on what could be a life-changing model for itself and the industry. After several years of hype and media attention, the Nissan Leaf electric vehicle finally debuts late next year.

The initial EV is one of many Nissan is planning in coming years as it expects EVs to make up 10% of global sales by 2020. The Obama Admin. is calling for 1 million plug-in vehicles on U.S. roads by 2015.

Carlos Tavares, Nissan’s executive vice president and chairman of the Americas’ management committee, says the auto maker is “very confident” about meeting the introduction date for the Leaf and looking forward to getting the car into the hands of consumers.

“I’m perfectly confident (the) Leaf is in the pipeline, perfectly on time, (and can) tell you that the focus of our teams is at the level you could hardly imagine,” Tavares tells Ward’s.

However, Nissan could delay the car, as it would with any model, if a problem arose that negatively impacted the consumer experience.

“If anything creates a problem, the customer comes first,” he says. “But so far so good.”

The Leaf will be available mostly to fleet customers, but Nissan also will allow purchases in regions with plentiful charging stations.

The auto maker plans a larger retail push in 2012.

Nissan’s Carlos Tavares confident Leaf EV will be on time.

Nissan promises a reasonable purchase price, ball-parked by one official to be $25,000-$30,000. But the auto maker hasn’t stipulated how much it will cost to lease the Leaf’s lithium-ion battery, the result of a joint venture between Nissan and NEC Corp.

The JV, Automotive Energy Supply Corp., may supply batteries to other auto makers in the future, as well.

“It’s a joint venture with NEC because we want to give that company the autonomy to be in contact with any OEM,” Tavares says, adding he doesn’t know if AESC already has had talks with other OEMs.

For now, Nissan’s generosity ends at letting other auto makers use its battery technology. Tavares says he’s not interested in uniting with other EV-minded OEMs to promote electrification.

However, noting Nissan’s propensity for partnerships, he doesn’t discount future technology sharing.

General Motors Co. is releasing its Chevy Volt extended-range EV about the same time Nissan debuts the Leaf, and BMW AG’s Mini-e model already is in fleet use in the U.S.

Nissan has announced more EVs, due in three to five years. They include an EV version of Nissan’s NV200 light-commercial van and a 4-seat Infiniti compact car.

The rollout, and the way lessees and buyers interact with the Leaf, will determine whether Nissan introduces the Infiniti EV for fleet usage or goes straight to retail with the car, Tavares says.

Tavares classifies Nissan’s overall performance in the U.S. market this year as “reasonably good,” noting it has been able to maintain a 7.2% share.

“I will say good in the sense we were able to right-size the company to make it profitable in what we believe will be a 10.5-million (U.S. industry volume) in fiscal 2009,” he says. “So we are reasonably pleased with this repositioning of the center of gravity of the company within a shrinking market.”

Leaf EV will go into fleet use and be available for sale with limitations in late 2010.

Ward’s data shows Nissan gained share through October, to 7.4% compared with 7.3% year-ago. In the period, Nissan’s total U.S. sales were down 24%, while the industry declined 25.3%.

Tavares is pleased Nissan is “managing on profit” this year and not aggressively accelerating incentives or increasing its fleet business.

Nissan snagged 8.7% of sales attributed to the government’s “Cash for Clunkers” promotion in August and September, he says, largely due to existing models. It launched only niche models in 2009 in the U.S.: the Nissan Cube and a drop-top version of the Infiniti G37 coupe.

Regarding Cash for Clunkers, Tavares says Nissan “did a good job to leverage that opportunity, and so far we have been managing in a responsible way to have profitable operations.”

For the second half of Nissan’s fiscal year, ending March 31, he anticipates improved results. “That’s what we have in our plan, and I think we will deliver.”

Tavares speaks with Ward’s a week after Nissan in Japan forecasts an operating profit of ¥120 billion ($1.3 billion), revised upward from an earlier expected loss of ¥100 billion ($1.1 billion) for its current fiscal year.

“So what does it mean? It means we are sitting in a position that is a little more comfortable,” he says. “And we expect to enjoy some growth in the market for next year.”

Nissan is calling for a total U.S. industry volume above 11 million vehicles during its 2010 fiscal year, starting April 1.

“We will continue this slow growth pattern that we are seeing now,” Tavares says. “We did what we had to do to reset the company in front of a smaller market.”

For now, Nissan is focused on the Leaf, and Tavares calls anything but the electrification of vehicles “transient” technology.

Near-term, he says Nissan needs hybrid-electric vehicles and downsized internal-combustion engines to improve emissions and meet its corporate average fuel economy requirements.

Tavares says Nissan “very soon” will announce more details of a plan to bring downsized gasoline engines with direct injection to market.

The auto maker already has said it will use what it calls a world-first “dual-injector” system, with an injector feeding fuel into each intake port, usually two per cylinder on small engines. Most port-injection engines have only one injector per cylinder.

Nissan says the new technology, due early next fiscal year, will improve fuel efficiency, speed up fuel vaporization and reduce hydrocarbon emissions.

Also on tap for boosting fuel economy – but with uncertain timing – is an expansion of its subcompact offerings.

Nissan says it will bring to the U.S. a model based on its new global V-platform, which will underpin the next-generation Micra B-segment car.

The platform will spawn at least three models, including a compact hatchback, but Nissan hasn’t specified which ones are due for the U.S.

“Certainly we are not going to consider because we are doing zero-emission (vehicles that) we are going to stop everything else,” Tavares says. “From a business standpoint, that would not be responsible. So we are going to move on all the fronts, because this is going to be a significantly long process.”

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