Hybrid cars are the new fashion of the moment but Nissan seems to lag its rivals

Carlos Ghosn is probably one of the best CEO in the automobile industry. I am especially talking about his skills for public relation. He is one of the most recognized names in the automobile industry. He will never say anything bad about its companies and will always blame it on the market. As much as I think he is a very strategist I believe Nissan and Renault are both lagging their competitors and will struggle in the current environment.

Today there was a very interesting article in the Nikkei Online about the arrival of new Nissan hybrid cars on the market in 2011. At first it could be interesting news as many believe hybrid cars to be the next leaders in the market. Nissan stayed away from hybrids for many years, mainly due to the very expensive cost of research and development (Toyota and Honda being the patent holders of most hybrid technology). It was definitely a wrong decision as the company needs imperatively to compete with its two Japanese in the hybrid market. Given that Nissan seems to have a leading advantage in the Electric car technology, the arrival of Hybrid cars would definitely strengthen its product line.

However, the article is also interesting because it explains that the future hybrid technology will be available only, at the moment, for luxury sedan cars like the Fugy. To me it is just a way to say: sorry, we do not have an efficient hybrid technology today and it is very costly for us to produce a hybrid car, as a result only an expensive luxury car can be a potential candidate to have this type of technology. I might be wrong but to me it is clear today that the market for hybrid is more and more oriented toward smaller cars like Honda and Toyota are doing. Gasoline prices are expected to increase in the next few years and customers will continue to prefer smaller and more economic cars over bigger sedan and SUV. It is, therefore, either a wrong strategy used by Ghosn and Nissan, or a sign of weakness.

Coming back to what I said about Ghosn, I think he is too smart to implement a wrong strategy and I believe the announcement is just a marketing campaign to make sure people do not forget about Nissan. At a time when electric cars are just not available in the market and announcements about hybrid cars are flooding the market (on US television it is almost impossible to not catch one of the new commercial from Ford, Honda or Toyota), Nissan has to manage to keep its name brand out there even though they have really nothing exciting to offer at the moment.

I would not be too excited just yet about Nissan. The stock has rebounded quite nicely in the past few months but I don’t think the company is ready to compete against Toyota and Honda. If you are interested in investing in Japanese automakers, I would suggest Honda then Toyota. You can’t go wrong with these two names given the strong lead they have in hybrid technology. I recently drove both the Prius and the Civic Hybrid and I can tell you that they are both great cars and very energy efficient …. at a reasonable price too !!!