Costly petrol-electric hybrids 'not good business', says Nissan chief Ghosn

The head of Nissan, breaking ranks with some of his leading rivals, says that building fuel-sipping hybrid vehicles makes little sense in today's world because of their high costs.

"They make a nice story, but they're not a good business story yet because the value is lower than their costs," said Nissan chief executive Carlos Ghosn.

Nissan will next year start making a petrol-electric hybrid version of its Altima sedan for the US market. But Ghosn said the model was only intended to help Japan's second-largest carmaker comply with strict fuel economy and emissions standards in states like California, not because he expects it to be a money-maker.

Nissan will license some technology for the hybrid Altima from Toyota, which is the world leader in hybrid production along with Honda.

The hybrids made by Toyota and Honda are in high demand, but production levels are still relatively small. Toyota plans to nearly double production of its hybrid Prius car for the US market this year, with production totaling some 100,000 vehicles.

Ford is alone among US carmakers in producing mass-market hybrid models and will introduce four new models between now and 2008.

Ghosn said that only about 88,000 of the 16.9 million light vehicles sold in the US last year were hybrids, adding that they are still considered "niche" products and something way outside the automotive mainstream.

He also poured cold water on hydrogen fuel cell vehicles, which many carmakers see as the industry's next big technological breakthrough.

"The cost to build one fuel cell car is about $US800,000 ($1.12 million). Do the math and you figure out that we will have to reduce the cost of that car by more than 95 per cent in order to gain widespread marketplace acceptance," Ghosn said. Meanwhile, Ghosn, who is credited with a dramatic turnaround at Nissan, is poised to take over as chief executive at France's Renault in May.

His role, simultaneously running operations at two major carmakers, is thought to be an industry first. Nissan - owned 44 per cent by Renault - scored the biggest sales jump of any major carmaker in the US last year, with a 24 per cent surge to 986,000 vehicles.