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Nissan To Produce and Sell Hybrid Vehicle

TOKYO September 25, 2006; Reuters reported that Nissan Motor Co. plans to sell a hybrid vehicle developed in-house in 2010, limiting its licensing ties with Toyota Motor Corp. to the Altima sedan due in the United States next year, Japanese daily Yomiuri Shimbun reported on Saturday.

Japan's two biggest car makers signed a deal in 2002 under which Toyota would sell its hybrid system to Nissan. Nissan, held 44 percent by France's Renault SA, has lagged in the development of the powertrain, which twins a gasoline engine with an electric motor to save fuel.

Nissan Chief Executive Carlos Ghosn remains lukewarm on hybrids, arguing they make little business sense because of their low profit margins despite their higher retail price. The Altima hybrid due next year was merely a necessity to clear California's average fuel economy regulations, he has said.

Still, Nissan has been working on its own hybrid technology and executives have said it is as good as those available on the market.

Nissan was not immediately available for comment. A Toyota official said the licensing deal beyond the Altima was open for discussion.

Hybrid cars, pioneered by Toyota with the Prius sedan, are gaining popularity around the world but remain a niche product even in the United States -- their biggest market -- making up less than 2 percent of new U.S. vehicle sales.