• Bloomberg

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Nissan Motor Co. will boost output capacity in Mexico to about 700,000 vehicles a year and may consider increasing exports from the U.S. as the strong yen makes North American production more competitive.

“Based on the currencies, there is a point in time where the competitiveness of those exports is going to increase,” Carlos Tavares, executive vice president and head of Nissan’s operations in the Americas, said in an interview Tuesday. He didn’t say whether there was a specific plan to increase shipments from U.S. factories.

Nissan is spending $600 million to upgrade two Mexican auto plants and is increasing U.S. production as a stronger yen make exports from Japan less profitable. The yen has risen against all the world’s major currencies in 2010 and is up about 5 percent against the dollar and 14 percent against the euro this year.

Shares in Nissan have declined 20 percent this year in Tokyo trading.

The automaker has already moved some production overseas, citing the rising yen. The company has begun assembling its new March small car in Thailand and will start making the vehicle in Mexico in 2011.

Nissan will cut output in Japan by about 20 percent from October compared with its September production plan because of the yen’s strength and the expiration of government subsidies, Yokohama-based spokesman Mitsuru Yonekawa said Wednesday.

The company’s U.S. factories are in Tennessee and Mississippi. The company exports U.S.-built light trucks to the Middle East and has shipped Quest minivans to China.

“We will continue to do that, and if the markets continue to grow, we will be happy to do it,” Tavares said.

The investment in Mexico, and the addition of subcompact car production there next year, increases the nation’s importance as Nissan’s export hub for Latin America, Tavares said.

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