TOKYO, Oct 26 – Japan\’s third-largest automaker Nissan on Tuesday unveiled its first full step into the hybrid market with its Fuga luxury sedan, as it warned of "crisis" in a market battered by a strong yen.
The model is the company\’s first electric-gasoline hybrid using its own system for the mass market and will be launched in Japan next week. The Altima sedan hybrid sold in the US is powered by Toyota\’s hybrid system.
The launch comes as Japanese automakers are struggling with a strong yen, which makes their goods more expensive with many firms looking at shifting production overseas in a bid to stay competitive and offset costs.
Nissan said it is working "with a sense of crisis" to lessen the impact of the yen\’s strength on its business, as the currency\’s surge threatens to erode profits in a key export industry for Japan, Dow Jones Newswires reported.
"We can\’t adequately express our concern about the sharp yen rise on our earnings by simply saying… we are worried about it. The company is now working with a sense of crisis," Toshiyuki Shiga said.
The automaker is reducing exports from Japan while increasing imports as a short-term measure to cope with the strong yen, Shiga said, and aims to speed up shifting production overseas in the long term, he added.
Despite announcing a huge profit for the April-June quarter, Nissan in July maintained its profit forecast of 150 billion yen for the fiscal year ending March 2011, with the automaker still wary of exchange rate volatility.
The Japanese unit hovered near 15-year highs against the dollar at around 80 yen on Tuesday, near its post World War II high of 79.75.
For every one yen fall in the dollar, automakers such as Nissan and Toyota can lose billions of yen in operating profits.
The Yomiuri daily reported Monday that top automaker Toyota would revise its dollar forecast for the second half of the current business year to March to 80 yen, which will mean a 1.85 billion dollar hit to its earnings.
Nissan will sell the Fuga hybrid for a starting price of 5.775 million yen (71,500 dollars), compared with 3.990 million for the gasoline model, which is known as the Infiniti M model overseas.
The company earlier this year said it plans to introduce 10 new products globally, including the Japanese and US release of its all-electric Leaf, which has become the fulcrum of its green ambitions.
Earlier this month Honda Motor launched a hybrid version of its popular Fit subcompact car in Japan, making it the cheapest petrol-electric car available in the nation in a bid to take on the dominant Toyota Prius.