Nissan Aims for 85% Localization Rate, Shifts Rogue

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North American Int’l Auto Show

DETROIT – Nissan Motor Co. Ltd. will shift production of its Rogue cross/utility vehicle from Japan to the U.S. in 2013 in order to reduce its exposure to currency fluctuations.

Carlos Tavares, chairman-Nissan Americas, says moving the CUV to the auto maker’s Smyrna, TN, plant is one of the first announced model shifts that will help the company achieve its goal of a higher localization rate.

The auto maker currently sells 69% of the models its builds in North America to customers in the region. By 2015, it aims to raise that ratio to 85%, Tavares tells attendees at a Society of Automotive Analysts dinner on the eve of the North American International Auto Show here.

“It’s a very economically driven decision,” he says to journalists after his speech.

The yen has risen so high against the dollar in recent years that Nissan and other Japanese auto makers have been faced with either raising their prices in North America or taking a hit in profits.

Nissan also wants to shift 50% of production parts from Japan to the Americas by early 2014.

Whether the auto maker requests its Japanese suppliers locate in the U.S. or it re-sources business with North American companies is “completely open,” Tavares says. “We have excellent partners. If they are present in the market, it is going to make things easier.”

Nissan Rogue to be built in Tennessee.

The movement of parts and models out of Japan should not be taken as a sign Nissan is abandoning domestic assembly, as it will retain an annualized production rate in its home country of 1 million units, he says.

The Rogue is a good candidate for U.S. production because it sells well here, last year becoming Nissan’s third best-selling U.S. model after the Altima midsize sedan and coupe and Versa subcompact hatchback and sedan.

Nissan sold 99,515 Rogues in the U.S. in 2010, up 28.9% from 2009, Ward’s data shows. The auto maker is allotting 100,000 units of capacity in Smyrna for the CUV.

More model-production-shift announcements are still to come. Nissan already has said the Leaf electric car, currently built in Japan, will be manufactured in Smyrna starting in 2012.

Tavares praises the increasing number of EVs being developed by other auto makers, saying they are good for the proliferation of the technology and for consumers.

He also says Nissan says Nissan will return to exhibit at the Detroit auto show in 2012. The auto maker last maintained a stand here in 2008.

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