Business Impact

Playing catchup in green technology, Nissan opens new resortlike tech center

May 15, 2007

ATSUGI, Japan (AP) – At Nissan’s new complex for technology, experimental car batteries were sitting in freezing temperatures, getting cooked in giant metal boxes and being rattled to simulate driving – part of the automaker’s efforts to catch up in the race to develop green vehicles.

The lithium-ion batteries, seen as advantageous because of their smaller size compared to existing systems, were being tested to withstand extreme temperatures at the center that opened Tuesday in Atsugi, just west of Tokyo.

The new facility underlines Nissan Motor Co.’s determination to develop environmental and safety technologies that are increasingly critical for riding out the tough competition in the auto industry.

”Whether products with technology that appeals to consumers can be offered in a timely manner will determine the winners and the losers,” Nissan Chief Executive Carlos Ghosn said in Japanese at the opening of the Advanced Technology Center.

Nissan officials acknowledge the near-collapse the company went through before its stunning revival under a 1999 alliance with Renault SA of France meant it could not invest in technology as much as they would have liked.

But for the past several years, Nissan has been investing more in developing new technologies, they said.

Ghosn told reporters that Nissan was under no pressure to find a new alliance partner, although his company had taken part in alliance talks with General Motors Corp. that GM eventually rejected.

”We’re not talking with anybody,” Ghosn said. ”I don’t think it’s the right timing today.”

He also said he was satisfied with the scale of the Nissan-Renault partnership, and denied expanding the alliance would be a must for gaining an edge in technology because Nissan was developing its own technology.

Surrounded by luscious green hills, the towering center has a dramatically cascading glass roof that allows engineers to share their collaborative work in a spacious setting. It will house 2,000 employees, working on everything from zero-emission electric vehicles to ”smart cars” that help avoid collisions.

Some analysts say Japan’s No. 3 automaker has fallen behind rivals Toyota Motor Corp. and Honda Motor Co. in developing gas-and-electric hybrid cars and other technologies that reduce gas emissions blamed for global warming.

Yasuaki Iwamoto, auto analyst with Okasan Securities Co. in Tokyo, says investing in the Nissan Advanced Technology Center is a step in the right direction for Nissan.

”Otherwise, Nissan has no chance of surviving the competition,” he said. ”Catching up won’t be that easy for Nissan. It’s not as though Toyota and Honda are going to sit still and do nothing.”

Nissan introduced a hybrid last year, but now licenses the technology from Toyota. Nissan is working on an original hybrid, set to be introduced by 2010, using what it says is a superior kind of battery technology – the lithium-ion battery that’s common in gadgets such as laptops and cell phones but has yet to be fully adapted to the more rigorous demands of a car engine.

Hybrids now available from Toyota and Honda use nickel-metal hydride batteries, although all major automakers, including General Motors, are working on lithium-ion batteries for vehicles.

Breakthroughs may be exactly what Nissan needs if it hopes to narrow the gap in hybrids with industry leaders like Toyota and Honda, analysts say.

Although hybrid sales are still a fraction of standard models, brand image tends to get a nice lift from such technology. Sales of Toyota hybrids and Honda small cars have jumped in the U.S. and other overseas markets lately because of soaring gas prices.

Nissan Senior Vice President Minoru Shinohara said Nissan wasn’t preoccupied with what rivals may be doing but it was focused on its own goals, such as perfecting its original hybrid system that he said will outperform the competition.

Nissan is also developing a ”three-liter car” capable of traveling 100 kilometers, or 60 miles, on just three liters – or about three quarts – of gasoline. The company hopes to unveil a new model in Japan in 2010.

”We have been preparing now for several years, and we are ready with several key kinds of advanced technology,” Shinohara said.