Patrick Pelata plans to halve the worldwide price premium Toyota cars enjoy over Nissan models within two years.
In 1999 -- before Nissan was reorganized by alliance partner Renault -- Toyota cars on average sold for $1,000 (E863) more than Nissan's.
"We want to halve that premium by 2005 and get rid of it by 2009," said Pelata, in charge of product development at Nissan and head of the carmaker's European operations.
Nissan has been seeking to boost its brand image, and the price premium that goes with it, with vehicles such as the Z sports car currently being launched in Europe.
This comes as part of Nissan's plan to boost its return on invested capital to 20 percent and secure an operating margin of 8 percent for fiscal 2004 ending March 31, 2005.
Nissan achieved an operating margin of 10.9 percent and a 19.5 percent return on invested capital in fiscal 2002.
Pelata said Nissan's sport-utility vehicles such as the X-Trail, Terrano and Patrol were key factors in improved profitability in Europe. After losing money for several years, Nissan Europe was profitable in fiscal 2001 and 2002 on "a local basis," Pelata said.
But Nissan Europe still loses money on a consolidated basis -- with its share of Nissan's fixed costs in Japan such as its headquarters, Pelata added.
Asked whether a Renault car would be built in Nissan's plant in Sunderland, England, where the Micra supermini is produced, Pelata said it is possible.
Because the British pound is floating freely against the euro, it is difficult to make any long-term plan about manufacturing in the UK, Pelata said.