Nissan Sees Trouble In US Car Market

Ever since he lost out on a bid to take control of GM (GM), Carlos Ghosn has seemed a bit punchy. His golden touch at Nissan and Renault have failed him. The companies are no longer considered paragons of the turnaround art. Ghosn has become ordinary.

He was especially ordinary in his recent assessment of the US car market. According to Reuters, "If we take the trend of the market in May and June it looks like we are going to be much below 15 million. Now I'm not sure if this is going to continue for the rest of year," Ghosn said. "We are preparing ourselves for the worst."

All of that seems fairly obvious.

What is less clear is what it means when a car company which makes mostly small sedans is becoming more worried. Big US vehicle manufacturers depend, to a large extent, on SUV and pick-up sales. Gas prices have destroyed that market. The consumer move has been toward lighter cars which get 30 mpg or better.

Ghosn is sending a signal that even tiny cars are not selling well. The US consumer is willing to keep his old vehicle. He does not want to take on more debt, or his buggy is worth less than the balance of his car loan.

Nissan Plans Electric Car in U.S. by ’10

In an interview Monday, Mr. Ghosn said Nissan decided to accelerate development of battery-powered vehicles because of high gasoline prices and environmental concerns, not just because of the need to meet stricter fuel-economy standards.

“What we are seeing is that the shifts coming from the markets are more powerful than what regulators are doing,” he said.

Mr. Ghosn said Nissan envisioned a broad range of electric vehicles, starting with small cars, and adding: “It’s not only about a small city car or a small minivan. It can also be about a small commercial vehicle and a small crossover.”

Mr. Ghosn was not always enthusiastic about alternative-fuel technology. In a 2005 speech to the National Automobile Dealers Association, he called gas-electric hybrids “niche products” useful only to meet strict fuel-economy and emission standards in states like California.

“It wasn’t long ago that Carlos Ghosn was a big naysayer about the role of electric vehicles,” said John O’Dell, senior editor at the auto Web site GreenCarAdvisor.com. “Obviously, something has opened his eyes.”