Nissan’s Ghosn Sees Recharged Prospects for Leaf EV

DETROIT –  An 18% price cut on the Nissan Leaf, new design elements and better mileage predictions should help increase sales of the electric vehicle by at least 20%, CEO Carlos Ghosn predicts.

The base price of $28,800 could result in transaction prices as low as $18,000 when federal and state incentives are considered, Ghosn says during a at a roundtable discussion with media at the North American International Auto Show here.

The price can be cut because the EV now is being built in Tennessee. The batteries and electric motors also are built in the U.S. Cars imported from Japan have suffered in part because the yen-dollar exchange rate raised the cost of the Leaf, and to protect margins the price could not be lowered.

Global Leaf sales in 2012 rose 22%, but that was less than half Nissan's expectations.

Ghosn says the auto maker is correcting what it can, but one of the problems with EV sales is the lack of recharging infrastructure. “We are working on the cost of all the components, and we have made design changes,” he says. “And we lobby for the development of charging systems.”

Nissan globally has about 6% of the overall market, and a profit margin of about 6%. The Power 88 program guiding the auto maker’s investments aims at an 8% global market share and an 8% profit margin.

“We are more Power 66 today,” Ghosn quips, but he maintains the 88 goal remains in place for 2016.

In the U.S., Nissan wants a 2016 share of 10%, which Ghosn considers the legitimate result of the auto maker’s investments here. Its 2012 share was 7.9%, down from 8.2% in 2011, as Nissan's sales increase of 9.5% was below the overall market gain.

Ghosn calls that combination of numbers a “hiccup,” and predicts that share will rise again this year on the way to the 10% goal in 2016.

One of the keys to reaching the Power 88 goals is the revival of the Datsun brand for low-cost cars in emerging markets. Nissan will launch a Datsun vehicle in India at the end of this year, and in early 2015 Renault and Nissan will introduce a new platform for low-cost cars in emerging markets. The platform will be cost less than Renault's M0 platform used by the Dacia Logan and derivatives, Ghosn says.

“Dacia is a low-cost car in Europe, but in India it is in the middle of the market,” he says. “What is low-cost depends on the market. In Russia, it is Lada. In India, it is Maruti Suzuki.”

Renault-Nissan tried earlier to form a joint venture with a motorcycle company to make very low-cost cars in India, but that project did not get off the ground.

Globally, Nissan sold 4.9 million units last year, falling short of its 5 million goal when sales stalled in the fourth quarter in China, as consumers there spurned Japanese brands due to the countries’ disputed possession of several islands in the Pacific Ocean.