No sign US auto market has hit bottom

NASHVILLE, Tenn - Nissan Motor Co Ltd sees no sign that industrywide U.S. auto sales have hit bottom, with full-year sales on track to slip to a range between 14 million and 14.5 million units, a senior U.S. executive said on Tuesday.

By (Reuters)

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Published: Tue 22 Jul 2008, 11:55 PM

Last updated: Sun 5 Apr 2015, 12:55 PM

Dominique Thormann, Nissan's senior vice president for finance in North America, said the automaker was in the process of reviewing projections for industrywide sales amid a slump prompted by high gasoline prices and weak consumer confidence.

"I think you're seeing most analysts in the range of 14 (million to) 14.5 (million)," Thormann told Reuters in an interview. "We're not going to be that different."

U.S. light vehicle sales, excluding heavier work and delivery trucks, were 16.15 million in 2007. Analysts have said the industry needs to maintain volume at about that level to break even on vehicle sales.

Thormann spoke on the sidelines of an event to mark the opening of Nissan's new, $100-million U.S. headquarters building in Nashville, Tennessee.

"It's hard to tell where the bottom is," Thormann said when asked about the outlook for U.S. industrywide sales. "All of the things that have been driving us down are still in place. Fuel prices are still high. Credit is still tight."

Thormann said Nissan is seeing high demand for passenger cars, particularly those equipped with more efficient four-cylinder engines, and weak demand for trucks.

"It's a vehicle type and a powertrain story right now," he said. "There has been a change in consumer behavior."

Nissan has gained share in a declining U.S. market. Its first-half sales were down just 2.4 percent compared with a 10.1-percent slide for the market overall, according to sales data from AutoData Corp.

'Room for everybody' in small cars

In April, Nissan announced a product tie-up with privately held Chrysler LLC. Under the deal, Nissan would build a small car for Chrysler using the North American automaker's design in 2010 and Chrysler would build a new full-sized pickup truck for the Japanese automaker using Nissan's plans in 2011.

The boom in smaller cars in the months since has left some analysts questioning whether Nissan could equip Chrysler with a car for its line-up that would steal sales from Nissan's own Versa.

But Thormann said Nissan expects demand would be strong enough to support both models, since the Versa and the Chrysler variant would be very different in appearance.

"I think the segments are big enough," he said. "There's room for everybody."

He said Nissan remains open to finding a North American partner to parallel its equity-based alliance with France's Renault SA but said no such discussions are underway. "There is nothing on the table," he said.

Separately, Thormann said Nissan would have an all-new electric car to test with fleet operators in the United States beginning in 2010.

Nissan, NEC Corp and NEC Tokin Corp have announced plans to invest about $115 million over three years in a joint venture to make lithium-ion batteries for use in the next generation of electric cars.

But rather than try to convert an existing small car for initial electric vehicle tests in California, where state laws require sales of zero-emission cars in coming years, Nissan would design and build an all-new vehicle, Thormann said.

Thormann also said battery technology has progressed quickly. Some skeptics have questioned the durability of lithium-ion batteries and how quickly the auto industry would succeed in bringing down costs for the expensive components.

"The technology has progressed, absolutely," he said. "We would not be making these kind of statements if we didn't think that we can satisfy consumer expectations."

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