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The Honolulu Advertiser
Posted on: Sunday, March 18, 2007

Nissan's Altima hybrid in 'test phase'

By Joe Guy Collier
Detroit Free Press

DETROIT — Even as it launches its first gas-electric hybrid in the United States, Nissan Motor Co. continues to downplay the importance of these green vehicles in the overall push to improve fuel efficiency and reduce emissions.

Nissan showcased a set of Altima hybrids last week at its Technical Center in Farmington Hills, Mich., but the automaker spent most of the time discounting the chance of the hybrid market taking off anytime soon.

The Altima hybrid, launched in January, is available in only eight states on the West Coast and in the Northeast where emissions requirements are more stringent. Nissan has no plans to sell it elsewhere in the United States.

Hybrids do not deliver sizable profits for automakers or big savings for customers, said Mark Perry, director of sedan and cross-car-line product planning for Nissan North America.

He called the Altima launch part of a "test phase" for Nissan. Diesel, ethanol or improved gas engines could beat out hybrids as a better way to save fuel and reduce emissions, he said.

"Consumers haven't voted yet completely with their wallets about which technology is going to work," Perry said. "People tend to be selective contributors to the environment. If it's kind of easy to do, they're willing to go along."

Nissan's stance is somewhat pragmatic. The company is using technology from Toyota Motor Corp. in its hybrids and probably will not have its own hybrid system for five years, putting it behind most of the field.

The U.S. hybrid market is far from clear. This year, hybrid sales are up 37 percent to 42,241 vehicles — but that's less than 2 percent of all sales, according to Autodata Corp.

With automakers putting a $3,000 to $5,000 premium on hybrids, most hybrid models do not save customers enough on gas to justify the added cost, said Kevin Riddell, manager of powertrain forecasts for J.D. Power and Associates.

Hybrids do have several factors in their favor, he said. Rising gas prices have raised consumer awareness of hybrids — and of fuel economy, in general. Higher volumes for hybrids and advances in technology should drive down costs.

Hybrid systems also are finding their way into a broader range of vehicles.