Date: Wednesday, February 6, 2008

While attending the Tokyo Motor Show to witness the unveiling of Nissan's futuristic NV200 concept van Neil McIntee managed to grab some time with Andy Palmer, corporate vice president, Nissan Motor Co and program director, global LCV business unit.

When is the NV200 due to go into production and be available in whatever form it ends up taking?

First of all you are making the assumption that it is going into production. It's a concept vehicle, but obviously it has some interesting possibilities and we wouldn't be investing in a concept of that ilk if we didn't think it has some real possibilities so I'm not going to tell you if it's definitely going into production. I'll let you use your own judgement to decide on that for yourself. It's clearly aimed at the global market with the requirements of customers very much in mind, including those in Europe. In Europe, however, we see that it is difficult to go directly up against the traditional van and truck makers; it's hard to go head-to-head with the Ford Connect or a Kangoo or Caddy so what we are looking for, whatever we do in that kind of market, is something that looks for a slightly different niche. So maybe what I can say is that NV200 is really trying to demonstrate what we would like to be in the future. The Nissan LCV brand is embodied in an acronym, SAT; Smart, Efficient and Transparent. So, for example, Smart in the way we execute the cab layout, the way we dimension the vehicle and the way that we address customer needs. But also Smart in a way that allows us to go not only for the European market but also to exploit the economies of scale elsewhere.


Is it also a way of perhaps separating yourselves from your alliance partner Renault?

Cross-badging has a place in the business when you need to be fast and expedient, but I don't think I would say that cross-badging is necessarily the one and only solution for us. We are a major LCV player and so is Renault. As it happens we sell more LCVs on a global basis, which is interesting. They sell more in Europe, but clearly our intention is to look, where we can, for global economy of scale and that's how we would seek to introduce new vehicles. Where that's not possible both partners of the alliance have the opportunity to look at each others vehicles. So we are not married to the concept of cross-badging and in some cases it doesn't make sense. Sometimes you need to have your own identity and NV200 is one of the ways that we're using to indicate what that Nissan identity will be in the future; and gauge reaction. Concept vehicles are all about gauging reaction and if it's positive it is perhaps an indication that we are on a right track.


The NV200 will not appear as a model, but presumably some of the technologies will?

Yes, absolutely. I don't think we are going to see pods in the backs of vans, but there's no doubt that globally you'll see some very significant elements of NV200 appearing on our new vehicles. Earlier this year Nissan launched a car called AD; basically a 'repmobile'. It embodies a lot of the concepts of the mobile office. The passenger seat drops down, a table drops out of the back of it, there's somewhere to plug a computer into, there's somewhere to store a briefcase and A4 files etc. NV200 is just taking those concepts a little further and I would say packaging it in an exiting style. And also interesting from a dimensional point of view. If we were a traditional French or Germanic maker we would be presenting a car-derived van, and we're not.


Kubistar has about less than a year left to run and you're not taking the revised Kangoo (on which it is based). Isn't that going to leave Nissan a bit exposed at the smaller end of the market in a short term?

If we didn't take the revised Kangoo, obviously there's a long roll-out stage of the old Kangoo; it will still be being built. Does it leave us exposed? We don't sell many, because we only have access to the van version. It's an important model in so far as it created a sales parc and it fills a certain gap. Clearly our intention is that we won't quit from that market sector; we'll replace it with something. How we execute that I cannot say at the moment. The reason for having Kubistar in the first place was to fill the gap between the Vanette and the future, and it wouldn't exist if we didn't think there was a future in that sector. But when we look at developing a replacement it has to be something more than just a van; it has to be more than that. When we come to market it will be with something exiting.


Would that be scheduled sometime towards the end of 2008?

I can't comment at the moment.


Turning to the pick-up market, when is the revised D22 due to appear?

D22 is a workhorse. It exists globally and we sell it in some parts of Europe. We didn't have a Euro 4 engine capability, but we will have in the near future.


So it's basically an engine upgrade?

It's essentially making it legal and putting it into the market to do what it does best, which is basically act as a low-cost workhorse. It's a global vehicle and very durable.


Where is it actually built?

It's built in Thailand and South Africa, a derivative is, and will be built in Mexico, it's built in Egypt and Iran, and it's built in relatively low volumes in Japan.


Is this one of the products that possibly might be part of the recent deal you did with Indian truck and bus manufacturer Ashok Leyland?

No I think we can find better solutions with Ashok Leyland. Surprisingly, pick-ups are not a big part of the Indian market. You would have thought that it was an obvious starting point, but the deal is looking at other areas, other opportunities. That's not to say that the D22 won't be built there, but it's not in the first batch of vehicles.


Will the initial product be just for the home market or for export as well?

Nissan's reason for working with Ashok is to address the Indian market as a whole and the majority of Ashok's intention is to enter the home LCV market. But of course when there's an excellent engineering capability — it's really, really good — and a low-cost manufacturing base, obviously within a few sentences of conversation the possibility of export is soon on a table. Right now our major intention, major reason for being in that dialogue is to address the Indian market where we sell no LCVs currently.


Is part of the deal drivetrains as well as whole vehicles?

Yes it is. Price points in India are among, if not, the lowest in the word. Basically prices are extremely low. Its hard to imagine being able to sell in those markets without having a high degree of localisation even when you sell under the Nissan badge where you are able to command a certain premium based upon a certain durability, reliability and standard features. The deal with Ashok is split into three areas. One is concerned with engineering, but basically it's product supplies. So it has a processing manager, engineering management, cost management, manufacturing engineering management and that's a 50/50 arrangement. Then we have a second joint venture — with Nissan having the majority control — for the manufacture of engines for both the domestic market and possibly for export. Lastly there's vehicle manufacturing in which Ashok will probably have the majority control which will produce vehicles with both Nissan and Ashok badges. What we have is a very balanced relationship with some remarkable people. Every time I deal with those guys I'm surprised and delighted by how technically able they are.


Any news on when the Cabstar Hybrid will be on sale in Europe?

We first showed it in September 2006 so it's a year and a half closer. The point is environmental importance in the LCV world and you only have to look at the upcoming EU regulations — Euro 5 and Euro 6 — to realise that there's increasing pressure on LCV manufacturers to improve their exhaust emissions, and specifically CO2. Fortunately for us one of our priorities is that we would like to be market leaders in cost of ownership and a big part of that is good fuel economy; and good fuel economy translates into low CO2 emissions. Basically we're in good shape when we consider what is in the pipeline.


Is the diesel/electric hybrid idea part of Nissan's Clean Diesel programme for the passenger cars?

Anything developed by NATC (Nissan Advanced Technical Centre) I have access to. It's one of the benefits of being part of a global car company. Some of the technology is not applicable, however, as it is specifically for passenger cars and there are also cost implications. We have a design and development capability called NMLT (Nissan Motor Light Truck) which specialises in light truck framed vehicles — Cabstar, Atleon — and part of its raison d'être is to develop clean and environmentally friendly technology. The Hybrid concept seen last year comes from that group. The technology isn't the same as for passenger cars, but the principles are not dissimilar. Some of the questions and problems which have to be solved in a car, particularly with regard to reliability, are equally apparent in light trucks.


What about the Lithium/Ion battery technology being developed at NATC?

Clearly we're not going to develop new battery cells when we have a section of the company which specialises in that sort of technology. Those are the natural synergies that we have and one of the advantages of being a car manufacturer. There are disadvantages, of course, and there can be a lack of focus, but hopefully by having the dedicated LCV business unit we can specialise while at the same time not losing sight of technologies being developed elsewhere within the company.


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