Nissan Makes Sales Call On Peugeot Citroen Group To Sell Diesels

TOKYO June 29, 2003; Dow Jones reported that Nissan Motor Co. has approached France's PSA Peugeot Citroen Group about using its large diesel engine to power U.S. light trucks and to support a possible launch of luxury cars in Europe, the Financial Times reported in its Monday overseas edition.

The approach, which is at an extremely early stage, comes despite Nissan being controlled by Renault SA , Peugeot's arch-rival.

Nissan is also considering developing its own diesel, working with Renault or using a Suzuki Motor Corp. diesel currently used by Renault, the FT reported.

Patrick Pelata, a director of Nissan and chairman of its European operations, said: "There is a program going on today for big diesel engines. We are contacting people. We are looking at the same time at what we could do either with Renault or inside Nissan," according to the FT.

Pelata said discussions had begun with Peugeot but were at an early stage, the FT reported.

However, Peugeot denied talks were under way. "There are absolutely no talks," said a spokesman. "There is a hope on their part, maybe," according to the FT.

Pelata said Nissan was mainly interested in having access to a large diesel for the U.S. pick-up truck and sports utility market, the FT reported.

But he said it was also a requirement for the launch of upmarket vehicles in Europe, either under the Infiniti brand the company uses in the U.S., or as Nissan's or Renault's, the FT reported.

Diesels make up around 40% of all car sales in Europe, and sales have been held back at brands such as Honda Motor Co., which lacked the more efficient engines.

"I hope to see (our) luxury cars in Europe before 2010," Pelata said as quoted by the FT.

The company remains concerned that European import tariffs of 10% would make luxury sales less profitable, but Pelata said the recent fall in the yen would help, the FT reported