Nissan's chief executive says the automaker has received over 13,000 orders in the U.S. and Japan for its new electric car, the Leaf, exceeding production capacity.
Nissan swamped by Leaf orders
Carlos Ghosn said Thursday the company is seeking to boost production line capacity to meet the demand. Currently it can produce fewer than 12 000 of the cars by next March. The first models of the zero-emissions Leaf will be delivered to customers in December.
Ghosn, who also heads France's Renault, said that while 2010 will likely be a volatile year, he's confident about Nissan's future as demand grows in emerging markets like China, where sales have risen 60% so far this year, and as consumers warm to electric cars. He also expects the yen to weaken, which would boost profit from abroad.
"For Nissan, the potential for profit in the midterm is big," Ghosn told reporters at corporate headquarters a day after the company reported upbeat earnings and forecasts.
"From everything we're seeing ... interest in zero-emission cars is very high, and we don't think it's going to require too much efforts in marketing," he said.
With the Leaf, Nissan is aiming to take the lead in the nascent electric vehicle market. So far, the company has received 8 500 orders from customers in the U.S. and 4 700 in Japan. Nissan hopes to build and sell 50 000 of the cars around the world during the first model year.
The Leaf's price falls to 3 million yen ($32 000) with Japanese government incentives, and it's just over $25 000 in the U.S. with federal tax credits.
China to incentivise?
Ghosn said Nissan is also closely watching to see whether the Chinese government will also introduce incentives for consumers to buy electric cars.
China's vehicle market is as important to Nissan as the U.S., he said. The automaker learned from the dramatic contraction of the U.S. last year not to rely too much on one market.
"I think this lesson will stay with us for a very long time, that we need to diversify our profit pillars," he said. "We are building in in Russia and in India, and soon hopefully in Brazil, other pillars of profitability for the company."
Nissan's main concern in China is adding production capacity to keep up with demand, but it was unlikely the company would announce additional capacity in China this year, he said.
Nissan reported Wednesday a dramatically smaller loss for the fiscal fourth quarter compared to a year earlier, and said it aims to triple net profit to 150 billion yen ($1.6 billion) for the full year.
Ghosn expects the Greek financial crisis to be short-lived, and he doesn't believe the "doom scenario" foreseen in Europe by some pundits.
"I have a tendency to say that the Europeans have sufficient resources, wisdom and knowledge to know what has to be done," he said. "It's already tough, but I don't believe in the doom scenario."