Nissan Motor Co. will consider Mexico along with the United States for a new North American factory to meet growing demand in both nations, CEO Carlos Ghosn said.
“We will need capacity in North America and yes, there is a high probability that in the future, we will be announcing a new plant in Mexico or the U.S.,” Ghosn told reporters Wednesday in Mexico City, without providing a timetable for the decision.
Nissan, the leading automaker in Mexico on a sales basis, is already building a third plant in the country worth $2 billion (about ¥160 billion) in the central state of Aguascalientes after breaking ground in July. The Yokohama-based automaker boosted production in Mexico by 16 percent to more than 583,000 vehicles in the first 10 months of this year, according to the Mexican Automobile Industry Association.
That makes Nissan part of a production surge driving Mexican auto output and exports toward a record level in 2012. Foreign automakers have announced $7.8 billion in investments in the country in the past 24 months, according to Sean McAlinden, a labor economist with the Ann Arbor, Michigan-based Center for Automotive Research.
Nissan’s new North America plant is needed based on sales forecasts for the next three years, Ghosn said in an interview, adding no decision has been made yet on the location or timing of the plant.
Nissan manufactures Sentra and Versa models in Mexico. It is also investing 2.6 billion Brazilian real (¥101.6 billion) to build a plant near Rio de Janeiro with a production capacity of 200,000 units. The facility is scheduled to open in 2014.
Demand in the U.S. “is recovering but has not yet reached the level seen before the 2008 financial crisis,” said Takeshi Miyao, an analyst at research firm Carnorama Japan in Tokyo. “Considering the U.S. demography and economy, the demand may keep recovering, so Nissan’s capacity in North America will not be enough and it needs another plant.”
Ghosn has said he wants Nissan to win a 10 percent share of the U.S. auto market, after its share declined to 7.9 percent from 8.1 percent a year ago. The company has a 25 percent share of Mexico’s market, making it the country’s leading automaker in terms of sales, according to the Mexican Automobile Industry Association.
Ghosn said he was in Mexico City to meet with President-elect Enrique Pena Nieto and to inaugurate a charging station for electric vehicles Thursday.
Nissan isn’t on pace to meet its sales target for lithium-ion battery-powered Leaf hatchbacks in the U.S., Ghosn stated in the interview: “The forecast we have given ourselves for the year will not be reached.”
In January, he set a target of selling 20,000 Leaf eco-friendly cars in the United States this year, but sales through October totaled 6,791, a 16 percent year-on-year decline.
Limited infrastructure for charging electric vehicles in the U.S. has tempered demand, according to Ghosn.
“We’re trying to convince more cities and states to invest in this infrastructure,” he said. “We recognize the fact that the increase of sales is taking more time than we thought at the beginning.”
Toyota to settle in U.S.
Toyota Motor Corp. says it has agreed to settle a lawsuit with U.S. investors over massive recalls of its vehicles from late 2009 to 2010 due to acceleration problems that caused its shares to plummet.
The automaker will pay $25.5 million (about ¥2 billion) to settle the class-action lawsuit, according to U.S. media reports Wednesday.
Toyota said it doesn’t acknowledge responsibility over defects and the fall in share prices but decided to settle the suit now instead of seeing the litigation drag on and possibly costing the firm more.
The investors argued the automaker failed to disclose information about the unintended acceleration of its vehicles even though Toyota executives were aware of the defects before the massive recalls, which led its shares to slide about 20 percent within a week.