Manufacturing News

Nissan ramps up capacity and products to gain 10 percent of China market

Japanese automaker Nissan Motor Co. launched a small compact car at the Beijing Motor Show. The automaker has also announced plans for capacity expansion in China to raise its market share from now 6.5 percent to 10 percent.

Nissan March

Nissan March

The 1.5-liter, 4-cyclinder engine compact hatchback small car, called March in China, will begin sales in the second half of this year. It will be built at Dongfeng Nissan Motor's plant in Huadu in Beijing.

The March, also known as Micra in Europe, will be sold for around 70,000 yuan ($10,245). It has a very high localised content ratio. "Above 75-80 percent localized in China," said Carlos Ghosn, president and CEO of Nissan Motor Co., speaking at the auto show.

The compact car segment is expected to grow as current urban car owners look to buy a second car. "Even though this is not the most popular segment in China, it will grow as the need to buy second cars in cities (grows)," he said.

Nissan aims to be present in every segment of the Chinese auto market, said Ghosn. A new car van, the Nissan NV200 has also been released at the Beijing show. Powered by a 1.6-liter engine, the van will be built at the Zhengzhou plant in Henan province and go on sale in China in June.

China is increasingly important for Nissan. "In 2009 we had 756,000 cars sold -- it's a little bit less than a quarter of our global sales," he said.

Ghosn is confident that the Chinese market will continue to grow. "You have 1.5 billion people with less than 50 cars for every 1000 Chinese," he said. "Twenty million cars in a few years is not unrealistic."

Capacity at the Huadu plant in south China's Guandong province is currently being ramped up from 360,000 units to 600,000 units annually. "Last year we lost market share as we were at full capacity -- so we decided to quickly add capacity," said Ghosn. The plant in Zhengzhou will increase capacity by 120,000 units.

Nissan will continue adding capacity in China with additional expansions and technological upgrades so as to reach annual production capacity of 900,000 units. "We currently have 6.5 percent of market share in China," said Ghosn adding that the automaker wants a 10 percent market share here. Nissan's sales target for 2010 is 850,000 units.

A new design studio in Beijing will begin designing cars specifically for China in 2011. The team will comprise of 20 designers of which many will be Chinese. "We're going to make sure cars developed in China will be developed by Chinese who know Chinese tastes," said Ghosn.

In 2011 Nissan will release the electric car -- the Nissan Leaf -- in selected cities in China. However local volume production will only begin once the government has outlined policies which will help jump start sales of electric vehicles in China.

"We are releasing the Nissan Leaf in specific cities in China -- these are selective agreements where we bring 50 to 100 cars," said Ghosn.

Mass production of the Leaf will only come when incentives are clarified. "What we are waiting for is the Chinese government policy -- what will the Chinese government offer as incentives for Chinese who buy electric cars," he said. "This is essential before we plan full local production of the Leaf."

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