Nissan to boost production capacity in China by 40%

Nissan has revealed its plans to invest about US$900 million (RM3.6 billion) to boost vehicle-making capacity in China by 40% by 2021. According to a report by Reuters, the move is part of a 60 billion yuan (RM35.8 billion) strategy to become a top three player in the world’s largest auto market.

A source close to the plan said Nissan and its Chinese joint-venture partner Dongfeng Group intend to invest roughly US$900 million for the envisioned manufacturing capacity expansion over the next few years. If so, that would boost Nissan’s vehicle production capacity in China to about 2.1 million vehicles a year. The investment is also in line with the automaker’s plan to expand sales in China.

Last year, Nissan sold approximately 1.5 million vehicles in China, but it aims to sell up to 2.6 million cars a year by 2022, said the source, who declined to be named because he is not authorised to speak to reporters about the expansion. Nissan also aims to boost sales of light commercial vans and trucks.

Currently, Nissan, along with Toyota, Ford and Honda each sell about 1 million-plus cars a year, but Nissan wants to break out of this second tier to be China’s top three, said Nissan China leaders. The Republic’s auto market has been dominated by General Motors and Volkswagen for nearly two decades, with each selling 4 million vehicles last year.

Also, Nissan and Dongfeng would use two existing assembly plants to produce Nissan passenger cars, and construct a new plant in Wuhan where state-owned Dongfeng is headquartered. Nissan also plans to increase its China market share by focusing on electric cars through its Venucia brand.

As part of its expansion, Nissan and Dongfeng are seeking approval from China’s regulators for a new assembly plant in Wuhan. If approved, the facility would have capacity to be able to produce about 300,000 vehicles a year.

Meanwhile, Toyota also plans to boost its China production capacity over the next few years by 240,000 vehicles a year, or a 20% increase from its current capacity of 1.16 million vehicles a year.

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