Nissan Plans Diesel For U.S. Market

Ghosn, chief executive of Nissan of Japan and Renault of France, will give details about Nissan's diesel strategy in a speech to the Council on Foreign Relations in Washington today.

Like other auto-industry leaders, Ghosn is struggling to satisfy a growing consumer appetite for fuel-efficient cars and demands in Washington that the industry do more to address global warming and oil-dependence issues.

In a meeting with editors and reporters at The Washington Post yesterday, he said the auto industry brought some problems on itself by fighting fuel-economy regulations over the years.

"The car industry . . . because it has been a little bit shortsighted, saying all the time" that a change in fuel-efficiency standards "is not possible, this is too expensive, this is not going to happen, put itself in a situation where everybody is focusing on the car industry," Ghosn said. "The carbon dioxide emitted by a car looks more damaging than the carbon dioxide emitted by everybody else."

Ghosn said any push for tougher fuel-economy rules -- known as corporate average fuel economy, or CAFE -- should be accompanied by tougher limits on other carbon-dioxide-emitting industries.

"If you take up CAFE for the car industry, just make sure that the other industries also have something similar," Ghosn said.

For its new diesel, Nissan is likely to use the diesel expertise of its alliance partner Renault. In 2005, 63 percent of Nissan's vehicles in Western Europe were equipped with diesel engines. Other automakers, including DaimlerChrysler, Volkswagen and Honda, are also planning more diesels.

As automakers compete to produce more-efficient vehicles, Ghosn urged lawmakers and regulators to make rules that don't favor one technology over another. "At the end of the day, it's about carbon dioxide emissions," Ghosn said. "Let's talk about performance, let's not talk about technology. The competition will be on technology."

Ghosn became famous largely for turning around Nissan, which was near bankruptcy in 1999. His rescue plan was built largely on catering to Americans' thirst for speed and horsepower during the craze for trucks and sport-utility vehicles in the 1990s.

Now Americans are demanding smaller vehicles with less powerful engines in the face of rising gas prices, global warming fears and the war in Iraq. The change has slowed Nissan's profits. The company is reevaluating global sales goals and has lowered its profit projections. In the United States, the company is in the midst of a restructuring. Nissan is still on track to earn about $4 billion this fiscal year.

Ghosn said the company is in a "performance crisis," making it clear that Nissan's troubles are not on the scale of those of the Detroit's Big Three automakers.

While all automakers are scrambling to turn out smaller cars and more fuel-efficient models, Ghosn has kept Nissan on the sidelines as the company has pursued the higher-profit, power-oriented models.

In the past, Ghosn has derided hybrids, saying their high prices did not make good business sense. Yesterday, Ghosn said he wasn't convinced that hybrids were the answer to U.S. fuel-efficiency needs. "There are a lot of technologies on the table and we are working on a lot of them," he said.

Nissan is introducing its first hybrid this year -- a version of the Altima sedan. The vehicle will come nearly a decade after Toyota and Honda entered the market and will use technology licensed from Toyota.