Wednesday, October 19, 2005

Nissan staged world debut of new GTR sports car at Tokyo show. Designer chief Shiro Nakamura says the show car is very close to the final shape of the production version which goes on sale in 2007.

Nissan powers up for global expansion

By John McCormick / Autos Insider

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TOKYO -- After engineering a successful recovery from the brink of bankruptcy six years ago, Nissan Motor Co. is facing a "dangerous period." Carlos Tavares, executive vice-president for product planning, says complacency is the new challenge as the company strives to expand its market penetration around the globe.

The series of three-year growth plans engineering by Nissan boss and revival architect Carlos Ghosn have progressed from 'Nissan 180' to 'Nissan Value Up.' New goals set for the company are industry leading operating profit, a 20 percent return on capital investment and volume increase to 4.2 million sales by 2008 (an increase of 812,000 from today's level).

Plans for new world markets include launching Nissan in the Middle East, Taiwan and Korea this year, moving into Russia in 2006 and adding Infiniti to China by 2007.

The total new Nissan and Infiniti model count will hit 70 over the next three years, compared to 44 new models under the previous plan.

Part of the overall plan is to make the Infiniti brand a global player, competitive with top tier luxury rivals including Mercedes, Lexus and BMW.

Tavares does not underestimate the effort needed to tailor new vehicles for different world markets. "In most cases we are dealing with very mature and competitive markets where nothing is obvious," Tavares notes. "Sometimes we can be trapped by our opinions and past experiences, so we have specific checks to make sure products will meet needs of target customers."

For example, the new version of the Nissan Sentra has been delayed a year after clinic results failed to meet expectations. Another misstep has been the fitful rollout of the Infiniti brand to certain markets. Steve Wilhite, senior vice president for marketing at Nissan, acknowledges that mistakes were made. "We treated Infiniti as an opportunistic brand," says Wilhite. "We introduced one model in Hong Kong, a few in the Middle East and Mexico, but we didn't approach markets strategically."

After much "soul searching" in the past five years, Wilhite says the plan for Infiniti now involves separating the brand from Nissan, improved dealer training and other measures to make it a legitimate tier one luxury brand.

"None of the OEMs is immune from making horrific opportunistic mistakes," adds Wilhite. He points to "tragic" branding errors by GM and Mazda. "For example, Chevrolet doesn't get full benefit from the Corvette and that's nobody's fault but GM's. Similarly Mazda does not benefit properly from the success of the Miata."

On the subject of launching a third brand in the US, like Toyota's Scion offshoot, Wilhite says he does not see the need for Nissan to follow suit. "We are blessed with the youngest, best educated and most affluent group of customers of the Asian competitors, so don't have some of challenges that Toyota may have faced."

In terms of research and development, Nissan has implemented a significant increase in spending to close on competitor, Honda, with a level equal to five percent of sales, explains Mitsuhiko Yamashita, executive vice president for R&D. This has resulted in Nissan registered a similar number of registered patents as Honda and Toyota in 2004.

According to Yamashita, Nissan's long term technical strategy involves a gradual shift from conventional internal combustion engines to electrically driven vehicles, first with hybrid technology and ultimately hydrogen fuel cell technology. Nearer term, Nissan plans to leverage its leadership in continuously variable transmissions (CVTs), with a new four-cylinder engine developed with Nissan's French partner Renault. The combination will produce significant power and fuel economy improvements, says Yamashita. The company's CVT design is also being supplied to DaimlerChrysler AG starting this summer. "One million CVT-equipped cars on the road give the same CO2 reduction as 200,000 hybrid vehicles," notes Yamashita.

Specific areas of technical focus for Nissan include an advanced lightweight high power electric motor and a unique flat design of lithium-ion battery than is superior to nickel metal hydride units being used by rivals.

Nissan is also developing its own fuel cell stack in house, as opposed to using a third party supplier's technology, a major step towards development of hydrogen fuel cell vehicles, although Nissan's mid-2020s timetable for FCVs introduction is less aggressive than rivals including Honda and GM.

John McCormick is a columnist for Autos Insider and can be reached at jmccormick@detnews.com