Ghosn: Hybrids Could See Sales Slowdown
04-14-06, 10:11 AM
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Ghosn: Hybrids Could See Sales Slowdown
http://news.yahoo.com/s/ap/200...M3MTY-
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By DEE-ANN DURBIN, AP Auto Writer
1 hour, 11 minutes ago
Nissan Motor Co. Chief Executive Carlos Ghosn said Wednesday he feels vindicated that hybrids could be seeing a sales slowdown, since he has repeatedly warned that it is too early to fully back the technology.
Ghosn also said Nissan employees have been given another month to decide whether they want to move from southern California to the company's new U.S. headquarters in Nashville. Employees now must tell the company by May 1 if they plan to move this summer.
Ghosn said the long-term financial and organizational benefits of the move outweigh the short-term disruption. He downplayed the problems the move will cause, saying Nissan has received 20,000 applications from people interested in working in Nashville.
Ford Motor Co. said last week it would offer zero-percent financing on the Ford Escape and Mercury Mariner hybrids nationwide. Ghosn said hybrids already are money-losers for automakers because of the expense of developing them, so to put incentives on top of that indicates hybrid sales are slow.
"At least admit I was the only guy saying, 'Watch out, the consumer decides, don't be excited about it,'" Ghosn said in an interview with reporters at the New York Auto Show. "I have some kind of satisfaction of being a little bit right on this one."
Ford Americas President Mark Fields said Wednesday that Ford decided to expand the incentives because they had proven popular in Washington and San Francisco, where they were first released. Ford doesn't break out its hybrid Escape sales from traditional Escape sales, but Fields said March was the hybrid Escape's best month since it was introduced last fall.
Ghosn said some consumers are finding hybrids don't save enough gas to justify their extra expense. Hybrids run alternately on gasoline or electricity. He said vehicles running on diesel or ethanol might hold more promise.
Still, Nissan is on track to release a hybrid version of the Nissan Altima sedan later this year. Ghosn said the product makes business sense because of California's air quality regulations.
"I didn't say I didn't believe in it. I said it's too early," he said.
J.D. Power and Associates predicts hybrids will make up 1.5 percent of sales this year, up only slightly from the same period last year even though there were more hybrid models on the market.
J.D. Power predicts hybrids will make up nearly 5 percent of the market by 2013. That's greater than current levels but far less than the 20 to 30 percent some analysts have predicted.
Ghosn also took aim at incentives earlier Wednesday, saying they have diminished the value of vehicles through constant discounting and bland design.
Ghosn said incentive spending has been going down in recent months, but automakers still spent $3,500 per vehicle on incentives in 2005. That was money that wasn't being invested in good design or new vehicles, he said.
"You'd be hard-pressed to name another industry in which so much emphasis is placed on discounting to move products," Ghosn said at the opening of media preview days at the New York Auto Show.
According to Edmunds.com, an online vehicle information service, Nissan spent an average of $2,314 per vehicle in March. That was less than the average of $3,205 per vehicle at U.S. manufacturers, but almost $1,000 more than Toyota Motor Corp.
Ghosn said some manufacturers are churning out too many vehicles that are too similar just to keep their factories operational, and "the customer gets the message that those products are not worth the prices printed on their stickers."
"Manufacturers must reawaken passion for cars and trucks and restore the value to the minds of our customers," he said.
Ghosn said Nissan increased its U.S. market share by offering well-designed vehicles that got an emotional response from buyers, like the Nissan Murano crossover and Infiniti G35 sedan. Nissan unveiled the 2007 G35 on Wednesday.
Nissan's U.S. market share rose to 6.3 percent last year from 4 percent in 1999. At the same time, General Motors Corp. and Ford saw their market share fall. Both U.S. automakers are now cutting jobs and closing plants to try to limit overproduction.
Ghosn wouldn't comment on GM and Ford's restructuring efforts.
"I don't think the solution comes from the outside," he said, adding that he rarely took others' advice when he was restructuring Nissan in the late 1990s.
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By DEE-ANN DURBIN, AP Auto Writer
1 hour, 11 minutes ago
Nissan Motor Co. Chief Executive Carlos Ghosn said Wednesday he feels vindicated that hybrids could be seeing a sales slowdown, since he has repeatedly warned that it is too early to fully back the technology.
Ghosn also said Nissan employees have been given another month to decide whether they want to move from southern California to the company's new U.S. headquarters in Nashville. Employees now must tell the company by May 1 if they plan to move this summer.
Ghosn said the long-term financial and organizational benefits of the move outweigh the short-term disruption. He downplayed the problems the move will cause, saying Nissan has received 20,000 applications from people interested in working in Nashville.
Ford Motor Co. said last week it would offer zero-percent financing on the Ford Escape and Mercury Mariner hybrids nationwide. Ghosn said hybrids already are money-losers for automakers because of the expense of developing them, so to put incentives on top of that indicates hybrid sales are slow.
"At least admit I was the only guy saying, 'Watch out, the consumer decides, don't be excited about it,'" Ghosn said in an interview with reporters at the New York Auto Show. "I have some kind of satisfaction of being a little bit right on this one."
Ford Americas President Mark Fields said Wednesday that Ford decided to expand the incentives because they had proven popular in Washington and San Francisco, where they were first released. Ford doesn't break out its hybrid Escape sales from traditional Escape sales, but Fields said March was the hybrid Escape's best month since it was introduced last fall.
Ghosn said some consumers are finding hybrids don't save enough gas to justify their extra expense. Hybrids run alternately on gasoline or electricity. He said vehicles running on diesel or ethanol might hold more promise.
Still, Nissan is on track to release a hybrid version of the Nissan Altima sedan later this year. Ghosn said the product makes business sense because of California's air quality regulations.
"I didn't say I didn't believe in it. I said it's too early," he said.
J.D. Power and Associates predicts hybrids will make up 1.5 percent of sales this year, up only slightly from the same period last year even though there were more hybrid models on the market.
J.D. Power predicts hybrids will make up nearly 5 percent of the market by 2013. That's greater than current levels but far less than the 20 to 30 percent some analysts have predicted.
Ghosn also took aim at incentives earlier Wednesday, saying they have diminished the value of vehicles through constant discounting and bland design.
Ghosn said incentive spending has been going down in recent months, but automakers still spent $3,500 per vehicle on incentives in 2005. That was money that wasn't being invested in good design or new vehicles, he said.
"You'd be hard-pressed to name another industry in which so much emphasis is placed on discounting to move products," Ghosn said at the opening of media preview days at the New York Auto Show.
According to Edmunds.com, an online vehicle information service, Nissan spent an average of $2,314 per vehicle in March. That was less than the average of $3,205 per vehicle at U.S. manufacturers, but almost $1,000 more than Toyota Motor Corp.
Ghosn said some manufacturers are churning out too many vehicles that are too similar just to keep their factories operational, and "the customer gets the message that those products are not worth the prices printed on their stickers."
"Manufacturers must reawaken passion for cars and trucks and restore the value to the minds of our customers," he said.
Ghosn said Nissan increased its U.S. market share by offering well-designed vehicles that got an emotional response from buyers, like the Nissan Murano crossover and Infiniti G35 sedan. Nissan unveiled the 2007 G35 on Wednesday.
Nissan's U.S. market share rose to 6.3 percent last year from 4 percent in 1999. At the same time, General Motors Corp. and Ford saw their market share fall. Both U.S. automakers are now cutting jobs and closing plants to try to limit overproduction.
Ghosn wouldn't comment on GM and Ford's restructuring efforts.
"I don't think the solution comes from the outside," he said, adding that he rarely took others' advice when he was restructuring Nissan in the late 1990s.
04-14-06, 12:55 PM
#2
Lexus Champion
hummm...that Ghosn nissan guy must have worked for GM....stupid....look at the freakin demand for the Prius....nuff said.
Make the right hybrid and people will buy it...nobody is buying the Honda Accord Hybrid because of the V6 they used....bad move by Honda. Meanwhile Toyota can't build enuff Prius'.
Make the right hybrid and people will buy it...nobody is buying the Honda Accord Hybrid because of the V6 they used....bad move by Honda. Meanwhile Toyota can't build enuff Prius'.
04-14-06, 01:25 PM
#3
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Ghosn...my hats off to him for getting Nissan out of the trenches. But they are strapped with a ball of chain, even though they are moving foward, they are moving slow. I was exepcting much more from Nissan with any innovative technology at the New York Auto show, did I miss somethin' there? The funny thing, what Ghosn said is true, but tell them(Toyota) somethin' they already know. They went through it in the past, and this is where they are now. Nissan(Ghosn) it's time to catch up, we are in the 21st Century, and Hybrid is part of that now. Makes me wonder if buddy has shares in the oil industry? ....Interesting! 
04-14-06, 02:16 PM
#4
Originally Posted by bagwell
hummm...that Ghosn nissan guy must have worked for GM....stupid....look at the freakin demand for the Prius....nuff said.
Make the right hybrid and people will buy it...nobody is buying the Honda Accord Hybrid because of the V6 they used....bad move by Honda. Meanwhile Toyota can't build enuff Prius'.
Make the right hybrid and people will buy it...nobody is buying the Honda Accord Hybrid because of the V6 they used....bad move by Honda. Meanwhile Toyota can't build enuff Prius'.
With that being said, Nissan is definitely behind in the hybrid market, however, where are MBZ and BMW hybrids? Anyone see any of those on the road lately? With the Altima hybrid coming later this year we can only wait to see how well Nissan is able to do in the hybrid market. Sometimes it is better to be a follower than a leader...As the numbers show, hybrid sales are not what was forcasted for them and it doesn't look like they'll meet that prediction this article speaks of, and with Nissan's past financial problems, it was/is probably best for them to sit back and watch the market a little bit before jumping into this.
04-14-06, 03:14 PM
#5
well, it is pretty shortsighted to group all hybrids together. It is powertrain choice.
In some cars it works, in some it doesnt... Ford offers huge discounts on Escape as it is. It is pretty old school SUV that needs new model.
At least MB is build new hybrid systems on their own... Nissan is just buying Toyota technology.
In some cars it works, in some it doesnt... Ford offers huge discounts on Escape as it is. It is pretty old school SUV that needs new model.
At least MB is build new hybrid systems on their own... Nissan is just buying Toyota technology.
04-14-06, 04:03 PM
#7
Originally Posted by bagwell
Make the right hybrid and people will buy it...nobody is buying the Honda Accord Hybrid because of the V6 they used....bad move by Honda. Meanwhile Toyota can't build enuff Prius'.
bad move on Honda to offer a V6 hybrid. While it makes sense in a small SUV (more power for added weight), the accord is pretty darn light already. If saving money/gas is the main priority, I dont see why people would spend $29k on an accord hybrid, when they can get a $17k accord LX 4cyl. Sure the hybrid gets just a tad wee better gas mileage, but I doubt it will regain that $12k anytime soon.
I say we go with Diesel Hybrid. Low end torque of an electric motor plus the low end of the diesel makes an awesome combination. 400ftlbs of torque at 1,500 RPM with a city consumption of 60mpg
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04-15-06, 03:21 AM
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Well, I don't know what percentage of sales (in dollars) the Sentra has posted in the past, but that's one car they won't be selling after the redesigned vehicle hits lots. And it looks like we can add the "redesigned" Altima to that list as well.
What Ghosn really needs to focus on now is an Enron-esque exit strategy; fleecing the company to the hilt; maybe convince Nissan's board to fork over an unprecedented remuneration package with bonuses founded primarily on last-year's sales because in a few more years, he might be looking for another job.
M.
What Ghosn really needs to focus on now is an Enron-esque exit strategy; fleecing the company to the hilt; maybe convince Nissan's board to fork over an unprecedented remuneration package with bonuses founded primarily on last-year's sales because in a few more years, he might be looking for another job.
M.
Last edited by whipimpin; 04-15-06 at 03:24 AM.
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04-15-06, 11:32 AM
#13
How can you have a hybrid sales slowdown when every Prius made is being sold along with the RX400h and the new GS450h as well? Just because some brands arent selling well (ford and honda) in the hybrid arena; doesnt mean that others aren't doing well (Toyota)
The LS600hL will become the new IT car in Hollywood; you just watch
The LS600hL will become the new IT car in Hollywood; you just watch
04-15-06, 11:54 AM
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What Ghosn said is true. *Some* hybrids are doing well, others aren't. California is the biggest market for hybrid vehicles. The ones that are selling well, ie. Prius and Civic are able to meet the gas mileage requirements which allow those vehicles to be used in the carpool lane at all times. This factor alone drives the sales of hybrids in CA more so than the higher gas mileage.
Consequently, other hybrids like the Ford Escape, Accord V6 hybrid, etc. don't sell well b/c they sell at a premium over the non-hybrid models, gas mileage is not nearly as good as the more efficient hybrids, and they don't qualify to be driven in the carpool lanes w/ 1 occupant.
As for Nissan licensing Toyota's hybrid technology or directly buying hybrid drives from Toyota, this is a great idea. If Toyota makes the best hybrid technology, why bother developing your own? It's a win-win situation for both mfgs. Nissan is able to quickly build a hybrid vehicle and test the marketing waters w/ minimal R&D investment. And Toyota benefits by making money on the technology from Nissan (either via licensing and/or actually selling units to Nissan which would increase the quantities produced which in turn reduces production costs) and defraying the cost of their hybrid development.
Consequently, other hybrids like the Ford Escape, Accord V6 hybrid, etc. don't sell well b/c they sell at a premium over the non-hybrid models, gas mileage is not nearly as good as the more efficient hybrids, and they don't qualify to be driven in the carpool lanes w/ 1 occupant.
As for Nissan licensing Toyota's hybrid technology or directly buying hybrid drives from Toyota, this is a great idea. If Toyota makes the best hybrid technology, why bother developing your own? It's a win-win situation for both mfgs. Nissan is able to quickly build a hybrid vehicle and test the marketing waters w/ minimal R&D investment. And Toyota benefits by making money on the technology from Nissan (either via licensing and/or actually selling units to Nissan which would increase the quantities produced which in turn reduces production costs) and defraying the cost of their hybrid development.
04-15-06, 12:34 PM
#15
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I think Ghosn is pretty smart in waiting out to see where the hybrid market will go. At this point we know who are the winners and who are the losers.
No car company wants to spend millions of dollars to develop a product that will flop. Since hybrid technology is still relatively new, I think he's waiting to see if it is will be worth it to spend so much R&D on anything that's not proven yet.
Wait for the market to speak and then deliver a car that will hit the sweet spot.
The bad thing to this approach is: by the time you figure out what will sell, other car companies are
already developing these cars and are moving forward and improving. You must then build something that will be even better to capture market share.
Will Ghosn's strategy work? So far he seems to be doing a decent job for Nissan. I like what Nissan has done and hope he's right. Toyota and Honda should be kept on their toes at all times.
No car company wants to spend millions of dollars to develop a product that will flop. Since hybrid technology is still relatively new, I think he's waiting to see if it is will be worth it to spend so much R&D on anything that's not proven yet.
Wait for the market to speak and then deliver a car that will hit the sweet spot.
The bad thing to this approach is: by the time you figure out what will sell, other car companies are
already developing these cars and are moving forward and improving. You must then build something that will be even better to capture market share.
Will Ghosn's strategy work? So far he seems to be doing a decent job for Nissan. I like what Nissan has done and hope he's right. Toyota and Honda should be kept on their toes at all times.