Nissans $8-Billion Plan for China

July 27, 2011
Automaker outlines generous three-year plan to increase market share

Nissan Motor Co. Ltd. indicates it will invest nearly $8 billion by 2015 to develop its brand in China, including new manufacturing plants and 30 new vehicle models. The latter will include a new electric vehicle.

Nissan CEO Carlos Ghosn announced the news at a presentation in Beijing. Ghosn described how the company has underestimated the expansion of automotive demand in China over recent years. Now, it will add China to the list of locales where it is adding production capacity and regional product initiatives. Other such markets include Russia, Brazil, India, and Southeast Asia.

However, Nissan aims to reduce its reliance on the U.S. market, which had been its largest outlet for several years. China became the automaker’s largest market last year.

"We used to be extremely dependent on one market,” Ghosn told reporters in Beijing. “The development of the Chinese market for us is making Nissan less dependent on one region, or one country, or one market."

Together with its joint-venture partner Dongfeng Motor Group, Nissan intends to sell 2.3 million vehicles/year in China. In 2010, the partners sold 1.3 million units.

The $7.8-billion plan that Ghosn introduced includes a new joint-venture plant at Changzhou, Jiangsu province, to produce light commercial vehicles. Next year a new passenger car assembly plant will start up in Guangzhou, and a heavy commercial vehicle plant will follow.

In addition, Nissan will export up to 80,000 vehicles/year from China to Southeast Asia and Latin America by 2015, Ghosn said.

Together, Nissan and Dongfeng plan to add 1,000 new dealerships in China by 2015, too, for a total of 2,400 across the country.

Among the products that the Nissan/Dongfeng team will introduce by 2015 will be the Venucia, an electric vehicle. The Chinese government intends to subsidize EV production with $1.5 billion/year over 10 years, to encourage the use of cleaner-fuel vehicles and to establish the China as a global leader in electric vehicle production.

With the intent of making the Venucia a global EV brand, Nissan has a design center in Beijing and intends to have up to 6,000 research technicians at work on the program by 2018.

The country’s drivers seem indifferent to electric cars: only a handful are on the roads, buyers have few EV choices, and the country has only a few charging stations. But, Nissan and other manufacturers are ready to take the government’s support for their initiatives.

"With the Chinese government saying clearly that they are going to support new energy cars, you are going to see more on offer," Ghosn said.