UPDATE 2-Nissan sees "huge sense of crisis" over strong yen

* COO:industry faces crisis that goes beyond near-term losses

* Nissan, others have assumed average dollar rate of 90 yen

* Comments made at launch of first Nissan hybrid

* Fuga/Infiniti M hybrid gets 19.0 km/litre in Japan

* Starts at 5,775,000 yen; Japan sales target 200/month
(Recasts on executive comments on yen)

By Chang-Ran Kim, Asia autos correspondent

YOKOHAMA, Japan, Oct 26 (BestGrowthStock) – A top executive at Nissan
Motor Co (7201.T: ) warned that Japan’s auto industry faces a
crisis beyond near-term losses as the yen hit a fresh 15-year
high and came within reach of a record peak against the dollar.

“We’re way past the point of talking about how the yen’s
rapid appreciation would damage our earnings, or that we’re
worried about it,” Chief Operating Officer Toshiyuki Shiga said
on Tuesday at the launch of the company’s new hybrid car.

“I feel a huge sense of crisis over the strong yen.”

Nissan, like many other Japanese automakers, has assumed an
average dollar rate of 90 yen for the business year to March 31,
2011 — a level Shiga said was still too strong for the car

But the greenback (JPY=: ) fell to a fresh 15-year low of 80.41
yen overnight — within reach of a 79.75 record low.

Shiga, also head of Japan’s auto lobby, said Nissan is taking
various steps to offset near-term currency losses such as
building cars exported from Japan at production sites abroad
wherever possible.

The strong yen’s longer-term implications are dire for
Japan’s world-leading manufacturing industry, however, and could
weaken the competitiveness of automakers and parts suppliers if
they are forced to move out of Japan, he said.

Shiga said Nissan wanted to continue building lower-margin
compact cars in Japan on top of value-added products like hybrids
and luxury models, repeating he wanted to maintain a domestic
production level of around 1 million units a year.

Nissan has made headlines by ending production of its
high-volume March subcompact in Japan, shifting to imports from
Thailand this year although that plan was made years ago and
independent of the yen’s recent strength.


The comments came as the company launched its first
gasoline-electric car developed in-house, the Fuga hybrid, which
gets listed mileage of 19.0 km/litre in Japan, comparable to a
compact car.

The vehicle, its top-of-the-line sedan, will start at
5,775,000 yen ($71,470). The Fuga is sold as the Infiniti M in
many markets, and the hybrid M is due to be rolled out in the
United States and Europe in coming months.

Nissan lags rivals Toyota Motor Corp (7203.T: ) and Honda Motor
Co (7267.T: ) by more than a decade in offering a proprietary
hybrid model. Instead, it is aiming to be the leader in the
zero-emission arena with top shareholder Renault SA (RENA.PA: ) by
introducing the first mass-scale electric car this year.

Nissan said its one-motor, two-clutch hybrid system would
achieve far better fuel economy, at a much lower technical cost
compared with hybrid leader Toyota’s complex, two-motor “series
parallel” system. [ID:nTOE66407E]

The Fuga hybrid gets the best fuel economy among high-end
gasoline-electric sedans, topping the Toyota Crown hybrid’s 15.8
km/litre, Nissan said. It aims to sell 200 units a month in

Nissan’s hybrid system has a structure similar to that of
Volkswagen AG (VOWG_p.DE: ), mounting an extra clutch that
separates the electric motor from the engine to allow for driving
using only electric power when the battery is charged.

Unlike Volkswagen, however, Nissan’s hybrid system needs no
torque converter thanks to advanced electronic controls twinned
with a lithium-ion battery, developed by its battery unit
Automotive Energy Supply (AESC), held with NEC Corp (6701.T: ).

Nissan has been selling a small number of Altima hybrids in
the United States using Toyota’s hybrid system to clear
regulations in California.

Nissan will announce second-quarter earnings on Nov. 4.
(Editing by Chris Gallagher and Joseph Radford)

UPDATE 2-Nissan sees "huge sense of crisis" over strong yen