Nissan plans to invest in environmentally friendly vehicles  Japanese automakers have struggled to emerge from the post-crisis gloom that has gripped the island nation in the wake of the natural disasters that struck on March 11. The earthquake and subsequent tsunami severely damaged factories and brought Toyota, Honda and Nissan to their knees, but the automakers are facing an even more menacing hurdle on their path to profitability: The persistently strong yen.

Japanese carmakers have helped to drive efficiency gains with their commitment to manufacturing cost reductions and overall safety, but 2011 is shaping up to be a difficult year as the nation's currency continues to make gains against the U.S. dollar. The uptick in the value of the yen, which is helpful for Japanese traveling abroad as it brings improved purchasing power, is also detrimental to the domestic manufacturing sector.

Nissan, one of the nation's three biggest automakers, continues to push aggressively for profit margin improvements, even as the yen has remained stubbornly high this year. The Wall Street Journal reports the carmaker's chief executive, Carlos Ghosn, affirmed the company is moving forward with its plan to increase its midterm profit.

Nissan officials asserted the firm would spend roughly 10 percent of its research and development budget over the next six fiscal years on environmental technologies. This uptick in investment will serve to bolster its lineup of fuel-efficient and environmentally friendly automobile offerings.

The Nissan Leaf, which was launched late last year and represented the company's first foray into the electric vehicle market, garnered a significant amount of media attention and has continued to sell out at dealerships across the globe, experts say. Nissan hopes to replicate its success as it moves to design and manufacture a number of new model vehicles.

The increased investment in electric vehicle production will help to synergize its current operations, leading to long-term business cost reductions. What's more, the company hopes to tap into the emergent demand for gas-free car models, Ghosn told investors recently.

Ghosn conceded, however, the company could be forced to shift manufacturing to other countries should the yen continue to gain in value. Japanese automakers lose hundreds of millions of dollars in profits as the yen strengthens, according to experts. 

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  1. Electric cars such as the Nissan Leaf are great environmentally speaking. However,the infrastructure isn't in place yet in order to support a large number of electric cars. We need many more charging stations built first. Automotive companies like Ford will need to join forces with federal agencies in order to build a grid that can sustain a large number of users.