Nissan CEO Carlos Ghosn may not think hybrids make much sense, but he is keen on compact cars to meet customer demand for fuel efficiency, as pointed out in this earlier post.

Yesterday, he announced that Nissan will produce and sell a new compact car with a 1.5-liter engine in North America, possibly in 2006. The new car will use the chassis from the popular March model sold in Japan. (Kyodo News) (Picture of the March to the right).

Nissan’s entry into the U.S. compact car market is likely to intensify competition among Japanese automakers there. Toyota Motor Corp. released its Scion passenger car targeting younger drivers last year, while Honda Motor Co.’s U.S. unit plans to import from Japan compact cars similar to the Fit subcompact car in 2006.

Ghosn pointed out that Nissan’s compact car sector has been profitable, and said the company is not considering importing cars from Japan as it aims to keep the ratio of local production to its overall sales in the United States almost unchanged.

This is speculation, but I’d guess that Nissan would use its new 1.5-liter HR15DE engine, developed with Renault, in the new compact. The HR15DE  has already appeared in Nissan’s just-released Note and Tiida models (Japanese market).

The new HR15DE is 30% lighter than a comparable engine (from Nissan) and, combined with a new CVT (Continuously Variable Transmission) promises a 28% improvement in fuel economy while increasing torque.

Nissan managed such an improvement through the reduction in weight plus:

• Shortening the combustion period has been shortened improving thermal efficiency  by strengthening the gas flow in the combustion chamber.

• Reducing friction by using a new machining method for the cylinder bores and applying a mirror-like finish to the crankshaft and cam bearing surfaces.

• Reducing the load imposed on the engine to drive the air conditioner and other auxiliary units  by enhancing their efficiency and improving the control program.

Let’s see what they actually come up with for the NA market.