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Sunday January 30, 8:50 AM
Nissan chief says hybrid cars make no sense

NEW ORLEANS, Jan 29 (Reuters) - The head of Nissan Motor Co. , breaking ranks with some of his leading rivals, said on Saturday that building fuel-sipping hybrid vehicles makes little sense in today's world because of their high costs.
"They make a nice story, but they're not a a good business story yet because the value is lower than their costs," said Nissan Chief Executive Carlos Ghosn.

Nissan will, in fact, start manufacturing a gas-electric hybrid version of its Altima sedan for the U.S. market in 2006.

But Ghosn said the model was only intended to help Japan's second-largest automaker comply with strict fuel economy and emissions standards in states like California, not because he expects it to be a money-maker.

Nissan will license some technology for the hybrid Altima from Toyota Motor Corp. , which is the world leader in hybrid production along with Honda Motor Co. Ltd. .

The hybrids made by Toyota and Honda are in high demand, but production levels are still relatively small.


Toyota plans to nearly double production of its hybrid Prius car for the U.S. market this year, with production totaling some 100,000 vehicles.

Ford Motor Co. is alone among U.S. automakers in producing mass-market hybrid models; Ford recently announced plans to introduce four new models between this year and 2008.

Ghosn's comments, which are likely to draw criticism from environmental groups, came in an address to the National Automobile Dealers Association, which opened its annual convention in New Orleans on Saturday.

In his speech, he noted that only about 88,000 of the 16.9 million light vehicles sold in the United States last year were hybrids, adding that they are still considered "niche" products and something way outside the automotive mainstream.

He also poured cold water on hydrogen fuel cell vehicles, which many automakers see as the industry's next big technological breakthrough.

"The cost to build one fuel cell car is about $800,000. Do the math and you figure out that we will have to reduce the cost of that car by more than 95 percent in order to gain widespread marketplace acceptance," Ghosn said.

Ghosn, who is credited with a dramatic turnaround at Nissan, is poised to take over as chief executive at France's Renault SA in May.

His future role, simultaneously running operations at two major automakers, is thought to be an industry first.

Nissan -- owned 44 percent by Renault -- scored the biggest sales jump of any major major car maker in the United States last year, with a 24 percent surge to 986,000 vehicles.
 

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he's thinking in short-term. hybrids aren't profitable, which is true. what he doesn't seem to understand that as more manufacturers offer more hybrids, the costs reduce. right now, only a handful of hybrids are available through only 3 car brands - honda, toyota and ford. in the long run, as long as other makes jump on board and offer more hybrid cars, the costs for hybrids will lower. simplel economics. i doubt gasoline powered cars were all that profitable when they first came available. shoot, those times just owning a car was comparable to owning a yacht these days, meanign only the filthy rich could afford them. toyota and honda aren't making loads of money on their hybrid offerings; in fact probably even losing money on them but being the environmentally friendly companies that they are, they are willing to sacrifice profit with hopes hybrids will catch on and demand will exceed supply. and eventually these cars will turn a profit. it'll take time but i think it's wrong of nissan to downplay the importance of hybrid vehicles in the long-term. maybe he's just jealous that nissan wont' be considered pioneers in hybrids like their arch rivals, toyota and honda. haha. just my $.02
 

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he's not just thinking in short term. hybrids may be cool and all, but it's still just a niche market, and probably will be for a very very long time (im talking like 30-40 years here, and thats if they ever do get a hold on the mainstream. americans still love their cars big, fast, and luxurious. hybrids won't change that.
 

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My feeling is that from a short term business standpoint he's correct. The R&D and retooling for a new product line is most assuredly huge compared to the sales figures they'll get in return. In 5-10 years or whatever, when the technology has been more wide accepted and refined, it'll be more cost effective to have more automobiles of these types.

Toyota unlike Nissan on the otherhand is ahead of the curve since they've dedicated themselves to biting that bullet and going head first with hybrids. Notice how many other peeps are lic. their technology from them?

Just two different POV's. One company wants to be a pioneer and is taking the risk to do so, the other is being more cautious and letting the market settle before totally commiting to this new technology. Nissan will just let others like Toyota & Honda pave the way then join afterwards.
 

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I gotta say, I think if Nissan sticks to this kind of thinking, they're going to end up shorting themselves. DDR2's sentiments about the economies of scale is correct. As the technology evolves, it will become exponentially cheaper. just look at computers, home electronics, auto electronics - they all eventually conform to the model that as time passes, the same goods become infinitely cheaper. Plus, Toyota has already announced plans to put hybrid motors in it's trucks and SUV's that will make more power than their current gaslonie V8's, and get better mpg than their current gasoline I4's.
 

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imo hybrids arent that bad,
isnt there a new hybrid accord pushing out 240 hp and getting around 35 miles to the gallon
 

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nfscg said:
imo hybrids arent that bad,
isnt there a new hybrid accord pushing out 240 hp and getting around 35 miles to the gallon
yeah, the AV6 hybrid is pretty cool. it has more torque and is more powerful than the regular AV6 and it gets civic mpg. but its also more expensive than the regular accord and probably ALOT more expensive to mod
 

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druuuu said:
yeah, the AV6 hybrid is pretty cool. it has more torque and is more powerful than the regular AV6 and it gets civic mpg. but its also more expensive than the regular accord and probably ALOT more expensive to mod
why would you buy a hybrid to mod?

anyways Nissan is thinking too much about the dollar bills, like all of you have mention it will take time to for hybrids to become more cost effective. but some fail to realize that building hybrids also helps boost brand image. in the end its gonna bite them in the ass, 30-40 years from now hybrids will catch on and when people wanna buy hybrids theyre gonna be looking to Honda and Toyota not Nissan.
 

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druuuu said:
he's not just thinking in short term. hybrids may be cool and all, but it's still just a niche market, and probably will be for a very very long time (im talking like 30-40 years here, and thats if they ever do get a hold on the mainstream. americans still love their cars big, fast, and luxurious. hybrids won't change that.
that might be true if the gas prices stay under like $1.50 or so for 87 octane.
as prices of gas rise, so does the demand for hybrids. why do you think people are waiting in line for the lexus hybrid Rh. but as many of us know, gas prices will continue to climb, especially in cali.

thats why i dont get the OPEC, they have the ability to influence prices of gas, but yet they just drive it up. my point is that if you keep driving gas prices up, you will lose in the long run. look at what happened when the there was a shortage of gas in the 70's and 80's, imports. Honda and toyota with smaller fuel effecient engines basically took a rocket up.

as for nissan, i am not surprised. nissan business model is more like pack as much hp into a car as possible and itll sell. it has worked so far. they can careless about the environment.

plus nissan is a company that follows the leader anyway, in terms of technology.
 

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divinewisdom said:
as prices of gas rise, so does the demand for hybrids. why do you think people are waiting in line for the lexus hybrid Rh.
people buy hybrids because they want to feel like theyre helping the environment. thats the only reason. its not because they dont have enough money to keep their tanks full. if they can afford a hybrid, then they can afford gas. i really dont think the price of gas has too much to do with hybrids. hybrids are like the hip thing to do "o im saving the world by using less gas."
 

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druuuu said:
people buy hybrids because they want to feel like theyre helping the environment. thats the only reason. its not because they dont have enough money to keep their tanks full. if they can afford a hybrid, then they can afford gas. i really dont think the price of gas has too much to do with hybrids. hybrids are like the hip thing to do "o im saving the world by using less gas."
i beg to differ. yes there are people that buy the cars to help the environment, but i think people buy those cars mainly for the environment.
like the hybrid civic, accord, prius, and lexus hybrid rh.

plus i think your theory of rich people affording gas is false. yes its true they can afford it, but are they willing to?
i know people not well off get the impression that rich people dont care about where they spend their money, but its totally different.
trust me, rich people know exactly where each and every dollar goes of their money. why spend money on something when you dont have to? know how people get rich? by spending wisely and investing. thats the difference between rich/educated people and average middle class.
 

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i read somewhere that it takes about 10 or 15 years for you to break even when you buy a prius.
 

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druuuu said:
i read somewhere that it takes about 10 or 15 years for you to break even when you buy a prius.
what you mean by break even? like save $3-$4k in gas to pay for the premium you pay for the hybrid?

i think its has alot of variables like how much you drive and gas prices.
 

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nfscg said:
imo hybrids arent that bad,
isnt there a new hybrid accord pushing out 240 hp and getting around 35 miles to the gallon
its actually 250 or 255 and it gets 29/37 city/highway

:)
 

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divinewisdom said:
what you mean by break even? like save $3-$4k in gas to pay for the premium you pay for the hybrid?

i think its has alot of variables like how much you drive and gas prices.
yeah thats what i mean. so because of that, hybrid's dont' make financial sense for the individual, meaning that rich people don't buy them to save money.
 

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druuuu said:
yeah thats what i mean. so because of that, hybrid's dont' make financial sense for the individual, meaning that rich people don't buy them to save money.
i dont think itll take 10-15 years. maybe 4-5.
that rate could futher be accelerated if you drive alot and the gas prices continue to rise.
 

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druuuu said:
yeah thats what i mean. so because of that, hybrid's dont' make financial sense for the individual, meaning that rich people don't buy them to save money.
I think that's a little too simplistic. The sales of hybrids went up yes, but the sales of Large SUV's also went down. Wether or not consumers really sit and calculate how long its going to take them to recoupe extra costs is not the issue, the fact that consumers like my mom can drive for two to three weeks on a single tank of gas that costs them less than $20 is. The immediate psychological effects of filling up an SUV at $40-50 a two times a week vs $20-25 every two weeks for a hybrid are unmeasureable. Plus if they're anything like my Mom they're constantly trying to see how much milage they can get out of it.

Hell when I fill up my turbo charged civic, I always have guys in pickups asking what kind of mileage I get and what I've done to it, and when I tell them its turbocharged, and I get 29mpg they usually get this look on there face and say "That's pretty good." Of course I don't ask them what they get, because I pretty much know already.

The prius and the civic are comparitivley slow, thats because they're programmed to get maximum milage, why? because they where the front runners of hybrid automobiles, now look at the accord, it doesn't get stellar milage, but it does get good milage for a V6, and actually performs better than the normal V6. At first I though honda needed the extra performance to help justify the price tag, but apparently they're advertising isn't playing that card to any extent either.

I always liked Honda's approach to hybrids more than toyota's but at this point toyota seems to have clinched a good marketing strategy, even if people aren't buying a hybrid simply to "save the planet" they figure, why not make sure everybody knows that I'm contributing anyway.
 

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druuuu said:
i read somewhere that it takes about 10 or 15 years for you to break even when you buy a prius.
Is the price you're using the difference between a Prius vs another Toyota that is simialrly equiped minus the hybrid technology? Otherwise I would think anybody buying a new car realizes that they're facing a hight amount of depreciation to their investment the moment they drive it off of the lot. ;)
 

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look at toyota and honda they sell hybrid for years now. long term they have better experience in that technology. compare to other car manufactures. the rest of the world can think of hydrogen or diesel as an cheaper alternative short cut but in reality their factories still set up for making a gasoline cars. not electronic cars.. not hydrogen or any other cars. and its a very simple fact that fast car doesnt have great fuel mileage and the other factor of people buying a car is the power. no one like weak cars.
 

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Shiba-Kun said:
Is the price you're using the difference between a Prius vs another Toyota that is simialrly equiped minus the hybrid technology? Otherwise I would think anybody buying a new car realizes that they're facing a hight amount of depreciation to their investment the moment they drive it off of the lot. ;)
yeah thats what im talking about. i THINK i read it in car and driver a while ago, but i could be wrong.
 
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