New $750m Tech Center Ignites Nissan Catch-up Plan

The Japanese carmaker Nissan Motor Co., Ltd. said last Tuesday that it will invest some $750 million in a new research and development centre to catch up with rivals in environmental and safety technology.

New technology center
Japan’s third largest automaker inaugurated the Nissan Advanced Technology Centre (NATC) on Tuesday in Atsugi, west of Tokyo, with some 2000 employees and laboratories for advanced vehicles, electric powertrains and other equipment.

The opening of the new facility underlines the determination of the automaker 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 in Atsugi, Kanagawa Prefecture.

"NATC has been established to accelerate the research and advanced engineering of breakthrough technologies for Nissan's next generation products," Nissan executive vice president Mitsuhiko Yamashita said. "Future technologies being developed are aimed at environmental sustainability and towards creating a safer mobile society," he added.

The investment will cover renovations to a powertrain development center and a global design studio, both in Atsugi, said the company in a statement. At the NATC, Nissan’s pool of engineers will pursue a range of eco-friendly technologies to limit the dangerous carbon dioxide emissions, including electric vehicles and hybrids, the statement went further. The Japanese automaker will also develop an "intelligent transportation system" in which data received from traffic beacons is used to alert drivers and aid slash reduce potential road accidents.

NATC is located in Kanagawa prefecture and that is adjacent to Tokyo. Nissan has two other major facilities in the prefecture for product planning, research and development and advanced development: the Nissan Technical Centre in Atsugi and the Nissan Research Center in Yokosuka.

The injury
The Japanese automaker was hit by a business slump in the late 1990s. Since then, it has lagged behind the Toyota Motor Corp. and the Honda Motor Co., Ltd. in the development of new-generation vehicles. Honda has intimated its plan to build a new laboratory in Japan in 2009. Last month, Nissan reported the first drop in annual profits since 1999 under its legendary chief, a Brazilian-born Frenchman who is also the Renault CEO.

Nissan officials acknowledged the company's near collapse before its dramatic revival under a 1999 alliance with Renault SA of France meant they could not invest in technology to the degree they would have liked. But for the past several years, Nissan has been investing more in technology, they said.

The aim
Nissan Senior Vice President Minoru Shinohara said the carmaker is not preoccupied with what rivals may be doing and is focused on its own goals, such as perfecting its original hybrid system that he said will outperform the competition.

Hybrids now available from Toyota and Honda use nickel-metal hydride batteries, although all major automakers, including the General Motors Corp. of the U.S., 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 added.

Analysts’ say
Some analysts said Nissan has fallen behind rivals Toyota and Honda in developing gas-and-electric hybrid cars and other technologies that reduce gas emissions blamed for global warming.

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

Maintaining the standing under such unfavorable conditions is a key impediment researchers must overcome to make ecologically friendly vehicles. Nissan's lithium-ion batteries, expected to have the major benefit of smaller size compared to the current systems, were being tested to to lift the standing of the automaker in the automotive battle arena.

Improving product lines
Nissan introduced a hybrid last year, but now licenses the technology from Toyota. The automaker is working on an original hybrid, set to be launched by 2010, using what it says is a superior kind of battery technology, the lithium-ion battery to be mated to Nissan engines. The batteries are commonly used in gadgets such as laptops and cell phones but have yet to be completely adapted to the more meticulous demands of a car engine.

At the automaker’s new complex for technology, experimental car batteries are stored in freezing temperatures, cooked in giant metal boxes and rattled to improve driving. The batteries are anticipated to play a critical part in Nissan’s effort to catch up in the race to develop green vehicles. The lithium-ion batteries were being tested at the center that opened Tuesday in Atsugi, just west of Tokyo.

"Whether products with technology that appeals to consumers can be offered in a timely manner will determine the winners and the losers," Ghosn noted.

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.

On alliance
The Japanese automaker is also confident in competing without additional alliance. Ghosn said last Tuesday that Nissan is under no pressure to find a new alliance partner and is not in talks with anybody despite news that a private equity firm will buy U.S.-based automaker Chrysler. "We're not talking with anybody. I don't think it's the right timing today,” Ghosn said while commemorating the opening of its new technology center.

In 2006, Nissan and its French partner Renault entered months of tie-up negotiations with Detroit’s General Motors Corp. in an attempt to create an auto juggernaut across Asia, Europe and North America. The talks ended with no agreement.

Ghosn has since held open the possibility of a further merger, adding that a North American link would be a natural extension. But he has said he is currently satisfied with the scale of the Nissan-Renault partnership. "There's no change," he said.