Nissan JV nears benchmark of 1 million vehicles

Full-year sales by Dongfeng Motor Co Ltd, the joint venture between Japanese carmaker Nissan Motor Co and its Chinese partner Dongfeng Motor Corp, are expected to surge 28 percent year-on-year to 905,000 vehicles, according to a recent statement from the company.

Passenger car sales are expected to reach 517,000 units, while sales of commercial vehicles is projected to total 388,000.

The company announced a plan last year to move 1 million vehicles in 2012, including 600,000 passenger cars and 400,000 commercial vehicles. With its strong performance this year and the huge potential of Chinese market, the company now says it will reach its goal two years ahead of schedule.

President of the joint venture Kimiyasu Nakamura attributed robust growth this year to a cut in sales tax on low-emission cars, expansion of its sales network in second and third tier cities and overall strengthening of its brand image.

The Sino-Japanese partnership has two passenger car plants in China - one in Guangzhou and another in Xiangfan, Hubei province. The Guangzhou factory has an annual capacity of 360,000 units while the Xiangfan facility can roll out 100,000 cars a year.

In July the company began construction on a new 5 billion yuan, 240,000-unit plant in Guangzhou. When completed in 2012, it will boost the company's total annual passenger car production capacity to 700,000 vehicles.

Nakamura acknowledged the venture's current capacity will not be able to meet market demand next year. He said existing plants will run three shifts and upgrade equipment to reach a capacity of 600,000 in 2010.

The joint venture produces seven passenger car models in China - the Teana, Sylphy, Tiida, Livina, X-trail, Qashqai and Geniss. Among them, monthly sales of the Teana, Sylphy, Tiida and Livina each surpassed 10,000 units this year.

Like other carmakers, the company anticipates that the small-sized car market in China will continue to roar ahead. It plans to bring two new models to China next year - a compact sedan and the NV200 minivan.

According to Nakamura, the entry-level compact model mainly targets young consumers who want to buy their first car. The model will have a fashionable exterior design and female consumers are likely to love it, he added.

China is now the second-largest overseas market for Nissan after the United States. President of Nissan (China) Investment Co Ltd Yasuaki Hashimoto said the company will sell a total of 742,000 passenger cars in China this year, a 32 percent increase over 2008.

He said Nissan plans to sell 850,000 cars in the country next year including its imported luxury brand Infinite.

The company estimates Infinite sales in China this year will soar 46 percent to 5,000 units and will hit 10,000 two years later.

The brand will also expand its sales network in China from 17 to 30 dealers by 2011, said Hashimoto.

Last month, Nissan Motor Co Ltd and Dongfeng Motor Co Ltd signed an agreement with the Guangzhou city government for the development of electric vehicles.

According to the deal, the Guangzhou government will offer support in building infrastructure facilities like charging stations, a necessity for wide use of electric cars.

Nissan plans to introduce its electric cars into China in 2011. Initially the models and batteries will be imported.

Nakamura said the carmaker is considering local production of electric vehicles at the joint venture's plant in Guangzhou at a later date.

The joint venture also signed an agreement with the city government of Wuhan earlier this year.

According to Hashimoto, Nissan and its Chinese partner intend to sign more deals with other cities to promote its electric cars.

(China Daily 12/21/2009 page7)