Nissan to Build 85% of U.S. Vehicles Locally by 2015
In just over three years, Nissan will spend $5.2 billion to add 425,000 units of new production capacity outside Japan.
August 13, 2012
Reacting to the profit-sapping effects of the strengthening yen, Nissan plans to continue moving production operations out of Japan.
In just over three years, Nissan will spend $5.2 billion to add 425,000 units of new production capacity in the U.S., Mexico and Brazil, says Carla Bailo, senior vice president-research and development, Nissan Americas.
The new investments will include annual production of 250,000 engines and 200,000 Leaf electric-car battery packs in Tennessee, resulting in a total of 9,000 new jobs in the Americas region, Bailo tells attendees at the recent Center for Automotive Research Management Briefing Seminars.
By 2015, 85% of Nissan models sold in the U.S. will be produced in North America, Bailo says. This likely will put Nissan ahead of Toyota, but behind Honda in localized sourcing, according to WardsAuto estimates. Toyota is expanding North American production and currently manufactures about 70% of the vehicles it sells in North America locally. Honda locally sources 89% of North American vehicles currently and WardsAuto forecasts96% by 2015.
Nissan is investing $1.7 billion to produce the Leaf EV at its big assembly plant in Smyrna, TN, starting in December and battery packs beginning in September. Smyrna now is running on three shifts and will be adding the Rogue cross/utility production next year. An additional 1,200 jobs are being added to support assembly of the Infiniti JX CUV at Smyrna, Bailo says.
Nissan also is constructing a new powertrain assembly plant in Decherd, TN, for 4-cyl. engines it will be producing for Infiniti and Mercedes-Benz through a Renault-Alliance strategic partnership with Daimler. The new plant will create more than 400 new jobs and have annual capacity for 250,000 engines by 2014.
The auto maker also is expanding operations at its current engine plant in Decherd to produce electric motors for the Leaf by late this year, which will create about 90 jobs, Bailo says.
At Nissan’s facility in Canton, MS, the auto maker is spending $23 million to add capacity for 50,000 more units beginning late this year. New production includes the auto maker’s frame-based Frontier and Xterra trucks and the ’13 Sentra compact car, adding 1,000 new jobs.
In Mexico, where Nissan already is running plants in Aguascalientes and Cuernavaca at full capacity, it is adding another $2 billion factory near the current Aguascalientes facility. The plant site will include a supplier park and a small test track. Initial employment will be 3,000. Annual production of 175,000 B-platform cars begins in late 2013.
Nissan also is investing aggressively in Brazil, Bailo says, including a new engineering center and a $1.5 billion plant that begins production in the first half of 2014.
Two major targets are driving the investments, Bailo says: 8% global market share by the 2016 fiscal year and a sustainable 8% corporate operating profit.
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