Nissan's Big New Hybrid

Nissan’s flagship brand is Infiniti which competes with BMW, Mercedes, the Lexus brand of Toyota (NYSE: TM), and the Acura brand of Honda (NYSE: HMC). The Cadillac brand of GM needs to be added to that list as does the faltering Lincoln brand owned by Ford (NYSE: F).

Nissan has an extremely modest market share. Infiniti also has a limited number of models and does not offer a hybrid, which puts it at a huge disadvantage.

Nissan means to solve its hybrid problem by introducing a new model of its “M” sedan, the most expensive passenger car of its product line.

The new “M” will retail for about $72,000. The gasoline-only version of the “M” has a base price of $53,000. The hybrid will get better gas mileage as would be expected–as much as 42 MPG which is excellent for a big four-door sedan.

The issue that Nissan faces with the hybrid Infiniti is that no one wants an Infiniti of any kind, so Nissan does not gain much with a hybrid which is late to market. US Infiniti sales were only 8,305 in September and M sales were 1,460 for the month.

Nissan joins a large group of car companies which believe that hybrids are the answer for poor market position. In reality, Honda and Toyota dominate the market for hybrids both in Japan and the US. Some companies such as Cadillac have introduced hybrid versions of their cars and even SUVs, but luxury buyers are probably less concerned about fuel economy than buyers with more modest incomes.

The new Infiniti M will be a curiosity in the firm’s showrooms which are currently filed with large SUVs and big sedans with powerful V-8s. The hybrid will not only sell poorly. It will look out-of-place.

Douglas A. McIntyre