Economy

Markets

Industries

Insights

Reports

Events

Nissan mulls yet more expansion

By Gong Zhengzheng (China Daily)
Updated: 2009-11-16 07:57

The popular Teana from Dongfeng Nissan.

After announcing a 5-billion-yuan expansion plan in July, Japanese carmaker Nissan Motor Co is mulling even further expansion in the southern city of Guangzhou to meet the blistering pace of demand for its cars, according to CEO Carlos Ghosn.

Nissan's joint venture with Dongfeng Motor Corp is building a new 240,000-unit plant in Guangzhou that will boost production capacity in the city to 600,000 passenger cars a year by 2012, according to the plan.

Ghosn said 600,000 cars will be enough to meet short-term demand, but insufficient in the long run due to the rapid growth of China's car market.

"We need more capacity in the mid term," he said.

"We see that the China market will continue to grow significantly in the next years - the Chinese government is taking very good measures to stimulate the economy and demand for vehicles."

Nissan will give priority to China for investment and introduction of new products because the country is one of the most important markets for the Japanese carmaker in the mid term for both sales and profits, he added.

Sales of Dongfeng Nissan, the passenger car unit of the joint venture, surged by 52.6 percent year-on-year to 422,460 units in the first 10 months of this year.

Inspired by the stronger-than-expected performance, the company has upgraded its 2009 passenger car sales target to 500,000 units from the previous 388,000 units.

Ghosn said the passenger car plant in Guangzhou has been a "benchmark" for Nissan's global plants and it will be one of the Japanese carmaker's "biggest, best and busiest" bases.

The joint venture has another passenger car facility in central Hubei province with an annual capacity of 100,000 units. Its current passenger vehicle lineup includes the Teana, Sylphy, Tiida, Livina, Qashqai and Geniss.

The joint venture also produces commercial vehicles under the Dongfeng brand.

Last year, it announced a plan for the year of 2012 to move a total of 1 million vehicles, including 600,000 passenger cars and 400,000 commercial vehicles.

"We will design cars mainly for China and eventually export to other markets," he said.

To meet the goal, Nissan will give the joint venture more responsibility for car design. The venture has a technical center in Guangzhou.

Electric vehicles

Ghosn said Nissan's plan to introduce its zero-emission electric cars into China in 2011 will need government support.

The company will first bring "a limited number" of electric vehicles and batteries as imports into Chinese cities and wait for conditions to mature for local production and mass marketability of electric vehicles, he said.

Related readings:  Nissan says Sept China vehicle sales up 63.8%  Nissan unveils zero-emission hatchback  Nissan to mass produce electric cars in 2012  Nissan to participate in China's electric car program

"We need some kind of incentives for consumers in China from the government to start the electric vehicle market," he said.

He suggested the Chinese government should subsidize electric car buyers like in the US, Japan and France because electric cars are much more expensive than conventional cars.

US carmaker General Motors announced earlier this year that it would introduce its Chevrolet Volt electric car into China also in 2011.

Domestic carmakers, such as BYD, SAIC and Chery, are also preparing to launch electric cars.