"When you go to the market, the decisions are going to be in function of the customers' reaction to the two technologies. Frankly, it is not obvious today," he said.

The head of the two auto giants said Renault and Nissan were working with both hybrid and diesel technology but will produce cars according to consumer demand. "When the market will shift, we will follow."

Ghosn was criticised at the firm's shareholder conference for his open sceptism towards hybrid technology -- which rivals Toyota and Honda have pioneered. Nissan last year failed to meet its net profit target for the first time since Ghosn took the helm of the Japanese automaker in 1999.

But Ghosn hailed the coming new clean diesel technology, saying it "is extremely performant, not only in terms of fuel efficiency but also in terms of emissions.

"The hybrid is still today a niche technology. It's a fact. The numbers show it," he added. Nissan nevertheless announced in late 2005 that it planned to roll out its first hybrid vehicle in the United States and Japan in 2010 in response to growing demand.

Hybrid vehicles, which run on a conventional gasoline (petrol) engine combined with an electric motor, consume less fuel and are considered environment friendly, although pricy.

Nissan said in April it would sell its first clean diesel cars in the United States within three years.

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