Nissan Exec Doubts Profitability of Hybrids

Carlos Ghosn, Chief Executive of Nissan said that he is not sold on the business aspect of manufacturing hybrid cars. Nissan's plans to build a hybrid Altima in 2006 remain unchanged, but the public reservation of one of the world's largest (and fastest growing) automakers is not a good sign.

Ghosn cited that hybrids don't have mainstream demand:

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.

While he is not doubting the utility of hybrid technology, Ghosn feels that there may not be much first mover advantage left to be had. Hybrids are more expensive to build than conventional vehicles, and the additional cost of innovation and manufacturing will offset the profitability of hybrid cars for Nissan.

Many speculated that Toyota's Prius was a loss leader for some time, although Toyota has publicly stated that the Prius is profitable.

I think Ghosn underestimates the demand for hybrid technology. The demand for the Prius is phenomenal from an "Early Adopter" perspective, that even long wait times all last year did not dampen. I personally have not yet obtained a hybrid simply because no one has yet released one in my prefered form factor, which is a minivan. While I would like a hybrid Sienna, to hopefully get all the prius bells/whistles, I would buy from anyone with an entry in the domestic minivan market.

Hey Brian,

While I don't know of plans for a hybrid minivan, Toyota will release a hybrid Highlander (seats 7) soon.

hybrids are the wave of the future and escape from Middle East dependency. What we need is a hybrid minivan.

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