Nissan launches new March, first baby with Renault

[Mike]

TOKYO, Feb 26 (Reuters) - Three years after getting together in a whirlwind romance, Japan's Nissan Motor Co Ltd (7201) and partner Renault SA (RENA) of France have their first baby -- the new March subcompact, or the Micra as it is called in Europe.

The first vehicle to be born from a platform -- the underbody and engine compartment -- shared by the two automakers, the Nissan March will also have much of Nissan's brand name riding on its sales performance.

"Today I can say that Nissan is ready for growth," Nissan Chief Executive Carlos Ghosn said as he launched the new vehicle in Tokyo on Tuesday.

Nissan has come a long way since March 1999 when Renault took a 36.8 percent stake in it. Closing five plants, slashing 21,000 jobs, halving its supplier base and posting record profits, the once-troubled automaker has become a model restructuring story.

Ghosn said on Tuesday Nissan would post record net and recurring profits for the year to March 31 in addition to record operating income, but declined to comment on specific numbers.

Last year Nissan forecast a net profit of 330 billion yen ($2.47 billion), 0.3 percent off the previous year, but said it would have revised it higher but for potential market uncertainty after September 11 -- uncertainty that has not materialised.

But despite its success, the question has hung over the company: can Nissan make a smooth transition from a restructuring carmaker to a growth carmaker? Or will the legacy of years of falling sales and unprofitable cars prove hard to shake off?

In North America, Nissan has gone far in answering its critics after its new Altima sedan won "The Car of the Year" award at the Detroit auto show.

But in Japan and Europe, where smaller cars reign, the jury is still out. Sales of admittedly bigger models launched in Japan last year -- the Cima luxury sedan, the Primera sedan and wagon -- have fallen below target, making success for the high-volume March all the more critical.

Nor will the task be easy. The original 1982 March was a pioneer in the subcompact class but 10 years have passed since its last remodelling and competitors now dominate the field -- Toyota Motor Corp's (7203) Vitz, and Honda Motor Co's (7267) Fit, called the Yaris and the Jazz in Europe respectively.

LUVVY-DUVVY

Both are blockbuster hits in Japan, with the Vitz averaging 19,000 units a month since its release two years ago and the Fit averaging 16,000 a month since its launch in June last year.

Nissan's ambitions for the March, which has a base price of 1.095 million yen, are also high.

"We've set a Japan monthly sales target of 8,000 units for the life of the vehicle -- a four- to five-year span -- but in the first year, it should sell over 10,000 per month," says Kouji Hori, programme director for the March.

In Europe, where the Micra will be launched in early 2003, Nissan is aiming for 160,000 to 170,000 vehicle sales a year.

Investing some 30 billion to 35 billion yen domestically in the new car, Nissan said costs are around 15 percent lower on the new March compared with the old version.

And while exact comparisons are hard to make, Hori says the costs of developing a shared platform were at least 20 percent lower compared with Nissan developing a new one by itself.

"It's thanks to those cost cuts that we've had a lot more freedom in design," added Satoru Tai, the March's chief designer.

The March has a curved roof reminiscent of Volkswagen AG's (VOWG) New Beetle and large oval headlights. Tai said his hardest call was deciding how bold the vehicle's lines should be.

He opted for bolder rather than not, a move that also reflects European tastes.

The path of true love, however, does not always run smooth.

Nissan's need to get the March to market by 2002 meant the platform -- the front half designed by Renault and the back half by Nissan -- does not include a common engine.

Thus Renault's Clio, to be built on the same platform, will have a Renault engine. It's a decision that avoids a lot of internal quibbling about which automaker makes the better engine, but it does not maximise potential cost benefits.

Even so, the two automakers appear to be more luvvy-duvvy than competitors that have also decided to get together.

Boardroom and cultural friction plagued DaimlerChrysler AG (DCX) (DCXGn) after the merger between Chrysler and Mercedes in 1998. Also, the first true child of their marriage -- the Chrysler Crossfire sports coupe which has 39 percent of its parts from Mercedes -- will hit the road only next year.

[Daniel]

That car is probably to contend with the BMW mini cooper.It is to be released in the US in march/april.I drove a prototype of the mini a few weeks ago.ITS FUN!!It had a 4cyl supercharged bmw engine.It put out something like 175 hp!They expect to sell for around $19000.The mini cooper is that little car you see all over europe and in all the movies.BMW bought them a few years ago.

[Mike]

Hmm... that thing should fit nicely under my F350. If one of those pulls out in front of me... I can just drive over and barely nick the top of the car...