Alliances Enhance Nissan’s Russia Strategy

VIENNA – Nissan will invest €167 million ($207 million) to double capacity at its Nissan Mfg. Rus plant in St. Petersburg, Russia, to 100,000 units in the 2014 fiscal year.

While the Japanese auto maker will continue building higher-positioned models in St. Petersburg, it will use the capacities of its strategic partner AvtoVAZ to manufacture less-expensive models as well.

Nissan will add 538,000 sq.-ft. (50,000 sq.-m) of production space, including press and plastics shops, at the plant, whose 1.600 employees produced more than 43,000 vehicles on three shifts last year.

The alliance between Nissan and French auto maker Renault is on track to obtain majority control of AvtoVAZ by 2014, but Nissan will continue operating its Russian subsidiary independently.

The St. Petersburg facility currently assembles Nissan Teana sedans, X-Trail SUVs and Murano cross/utility vehicles. The expansion will allow simultaneous production of up to five different models.

Nissan’s future portfolio will include the next-generation Qashqai CUV, which will be built locally for Russia in St. Petersburg, while the Sunderland, U.K., plant will continue producing the vehicle for other markets.

A Reuters report quotes Dmitry Mikhailov, the plant’s general manager, as saying the fifth model to be built in St. Petersburg is the Nissan Pathfinder CUV, with production set to launch in 2015.

The Renault-Nissan alliance and its partnership with AvtoVAZ comes into play with Nissan’s plans to manufacture cars at the Russian auto maker’s plant in Togliatti. Volume production of the new Nissan Almera, a sedan based on Renault’s B0 platform and developed specifically for the Russian market, launches in November.

Nissan says the AvtoVAZ plant will play a major role in the introduction of the revised Datsun brand in Russia. The auto maker plans to launch Datsun cars in 2014 with initial production in India and Indonesia as well as Russia.

Two budget Datsun models will be offered initially, followed by a third vehicle, probably a CUV, Nissan Executive Vice President Colin Dodge is quoted as telling the Russian media.

Datsun is key to the auto maker’s expansion plans in Russia, where it is anticipated the brand could contribute up to one-third of Nissan’s European sales by 2016, Dodge says. Up to 80% of Nissan products sold within Russia will be manufactured locally by then.

Nissan sold 138,827 vehicles in Russia in 2011, up 74.4% from year-earlier, according to WardsAuto data. Deliveries through April of this year totaled 53,923, up 44.2% from prior-year. The brand ranked No.7 in sales of cars and light-commercial vehicles in Russia with a 6.1% market share.

In addition, Nissan’s premium Infiniti brand sold 7,042 cars in Russia last year, up 50.7% from 2010. It sold 3,655 units this year through April, up 55.2% from like-2011.

“Nissan already has a very strong local presence and today we are the largest Japanese car maker in Russia, but we want to triple sales and double market share over the next four years,” Dodge says.