Potential Merger of Activities in Nissan and Renaults Future

FRANKFURT, Aug 16, 2005; Reuters reported that Japan's Nissan Motor Co Ltd could merge some of its activities with sister company Renault of France, Nissan's chief operating officer said in a newspaper interview printed on Tuesday.

"There won't be any merger at group level, but lots of things are conceivable at the level of subsidiaries," Toshiyuki Shiga told Germany's Boersen-Zeitung.

He cited auto finance and logistics as possible areas where a combination could make sense and said a cross-border team was working on such issues.

Renault has a 44 percent stake in Nissan and Carlos Ghosn is chief executive of both companies.

Shiga said Nissan did not want to get drawn into a price war in North America, where Detroit's big three carmakers have recently won back market share by offering all customers the same steep discounts that employees get.

Car prices should actually rise given higher raw materials prices, he said, but he pointed out that Nissan had no new car launches in the U.S. market until early next year.

"Thus, higher incentives will be needed and we have to proceed cautiously in setting prices," he said.

"Basically, GM , Ford and DaimlerChrsyler have a large U.S. market share. If they stage special deals, we cannot adopt the same strategy. The only thing we can do is offer customers good quality and a good dealer network."

Shiga said he was not satisfied with Nissan sales in Europe and said closer cooperation with Renault could make sense to strengthen its distribution network.