Manufacturing News

Nissan to hike China light-vehicle output 40%, report says

Nissan Motor Co. plans to invest about $900 million (6.17 billion yuan) to boost car and light-truck production in China 40 percent by 2021 as part of a 60-billion-yuan strategy to become a top three player in the world’s largest auto market.

Nissan and its Chinese joint-venture partner, Dongfeng Group, plan to invest roughly $900 million to expand manufacturing capacity over the next few years, according to a person close to the plan. The expansion would boost Nissan's vehicle production capacity in China to as many as 2.1 million vehicles a year.

The investments are part of a previously disclosed multi-year plan to expand Nissan's sales in China.

China's light-vehicle market has been dominated by General Motors and Volkswagen AG for nearly two decades, with each selling 4 million cars and light vehicles last year.

Nissan, along with Toyota Motor Corp., Ford Motor Co., and Honda Motor Co., lag far behind, each selling 1 million-plus vehicles a year. Nissan wants to break out of the second tier to become a top-3 China automaker, Nissan China leaders have said.

Nissan sold 1.5 million vehicles in China last year. Its goal is to sell up to 2.6 million vehicles a year by 2022, said the source, who declined to be named because he is not authorized to speak to reporters about the expansion.

Nissan in February outlined a five-year plan, dubbed “Triple One,” to increase market share in China by focusing on electric vehicles and the Venucia, a no-frills local Nissan brand in China -- two market segments expected to see a surge in demand. It also aims to boost sales of light commercial vans and trucks.

Nissan and Dongfeng would use two existing assembly plants to produce Nissan brand passenger cars and construct a new plant in Wuhan where state-owned Dongfeng is headquartered.

Nissan, part of the Renault-Nissan alliance, plans to use the added capacity to produce both EVs and gasoline-fueled cars for the Nissan brand and its China-only Venucia brand.

As part of the expansion, Nissan and Dongfeng are seeking approval from China regulators for a new assembly plant in Wuhan. If approved, the factory would have capacity to be able to produce about 300,000 vehicles a year.

Rival Toyota also plans to boost China capacity over the next few years by 240,000 vehicles a year, or by about 20 percent, from its current capacity of 1.16 million vehicles a year.

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