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Nissan in "Crisis Mode," Banking on Electric Cars

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Electric cars and low-cost vehicles in emerging markets: That’s the name of the game for Japan’s Nissan Motor Co. in the next fiscal year. Reporting a net profit of 42.4 billion yen (about $458.7 million) for the year ending March 31 and a quarterly loss of 11.6 billion yen ($125.5 million), Nissan executives emphasized signs of recovery and strategic commitment to greener vehicles Wednesday in remarks to shareholders. In the previous year, ending March 2009, Nissan reported a 233.7 billion yen ($2.5 billion) net loss.

“Although we continue to operate in an environment that is volatile and uncertain,” Nissan President and CEO Carlos Ghosn said in a presentation today in Yokohama, Japan, “fiscal year 2010 will be an important year in which we launch an affordable, mass-market, all-electric, zero-emission vehicle, extend our presence in emerging markets and develop additional synergies in the Renault-Nissan alliance.” Ghosn, who also heads up Renault, commented that while the company is “still operating in crisis mode, Nissan is well on track toward complete recovery without any compromise to our strategic priorities.”

Nissan plans to launch its first electric model, the LEAF sedan, in select U.S. markets in December, with national sales slated for next year. At $32,780 (before incentives), the car could be one of the cheapest highway-capable electric vehicles on the road in coming years. The pricing — which Mark Perry, director of product planning and strategy for Nissan North America, has told us will allow the automaker to turn a profit on the vehicle — places the LEAF slightly under retail prices expected for BYD’s e6, Coda Automotive’s Coda sedan, Tesla’s Model S and General Motors’ Chevy Volt (see: 12 Plug-in Cars You Can Drive by 2011 and Electric Sedan Smackdown).

Nissan expects capital spending to reach 360 billion yen (about $4 billion) or 4.4 percent of sales in the fiscal year ending next March, up from 273.6 billion yen or 3.6 percent of sales in the 2009 fiscal year. According to Bloomberg, Ghosn said the increase in that percentage will stem from the automaker’s buildout of manufacturing capacity for electric cars and efforts to expand in emerging markets.

Ghosn also commented that the Renault-Nissan Alliance’s new partner, German automaker Daimler, will contribute to the company’s “complete recovery and enable future growth.”  That will mean, “growing and being sustainable in a new era that requires meeting the growing demand for affordable mobility while being conscious of and responsive to environmental requirements,” he explained.

Executives from Daimler and Renault-Nissan announced in April a comprehensive partnership to share powertrains and architecture for compact cars and light commercial vehicles. Among other projects, the companies plan to cooperate on electric versions of Daimler’s Smart Fortwo and Renault’s Twingo, and explore “opportunities to co-develop technologies related to electric vehicles and batteries.” In Japan today, however, Ghosn said it’s too early to disclose how the deal will unfold in terms of sharing technology for electric vehicles, according to the AP.

In a time when many automakers are racing to increase the range and decrease the cost of plug-in vehicles in upcoming generations, Nissan also plans to raise its investment in research and development to 430 billion yen (about $4.6 billion) in the 2010 fiscal year, compared to 385.5 billion yen ($4.2 billion) in last fiscal year.

The automaker will have some help when it comes to ramping up EV production. Nissan closed a $1.4 billion loan with the Department of Energy earlier this year, with the funds set to go toward retooling of a Smyrna, Tenn. plant for Nissan’s electric LEAF sedan, as well as batteries for the vehicle.

Nissan’s plan calls for production of the LEAF to begin in Oppama, Japan, and for the Smyrna plant to come online in 2012. In addition, the LEAF model and batteries are slated to start rolling off assembly lines at a plant in Sunderland, UK in 2013, with aid from the UK government.

The automaker sold 3.5 million vehicles in the year just ended, including a strong push from China, while North America and EU sales declined. For the 2010 fiscal year ending next March, Nissan is forecasting 3.8 million vehicle sales. Electric cars will represent just a drop in the bucket for the time being, with the automaker targeting sales of 6,000 units for the LEAF in Japan and aiming to bring in 20,000 reservations for the model in the U.S. before it launches in select regional markets at the end of this year.

Images courtesy of Nissan

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8 Responses to “Nissan in "Crisis Mode," Banking on Electric Cars”

  1. Good for them but, no matter I MYSELF would like to see green vehicles on every street of every major city… It’s going to be a while.

    There are political and financial interests ate stake which have been acting like some sort of “friction” to mass development of green cars.

    Hopefully, once the oil will finish, companies will push green cars more and more.

  2. Ernie Hernandez

    Nissan reported a loss of $2.5 billion last year, along with most other auto manufacturers. Nissan reported a profit of over $450 million this year. Somehow I fail to see this as “crisis mode”.

    • That was actually Carlos Ghosn’s description. He said, “Though we are still operating in crisis mode, Nissan is well on track toward complete recovery without any compromise to our strategic priorities.”