Bloomberg News

Nissan’s Ghosn Said Acu Plant Not as Cost-Competitive as Resende

October 06, 2011

Oct. 6 (Bloomberg) -- Nissan Motor Co. Chief Executive Officer Carlos Ghosn said the carmaker chose to build a $1.4 billion plant in Resende, Brazil, rather than at a site at the Acu Port in Rio de Janeiro “only for cost reasons.”

Nissan, Japan’s second-biggest automaker, said today the plant that’s about 100 miles (160 kilometers) west of Rio will be able to build 200,000 vehicles a year when it opens it in 2014. The company also considered putting the plant at the Acu complex being built by Brazilian billionaire Eike Batista.

“We analyzed the cost, not only of the plant and investment, but of the cars out of Acu compared with the cost of cars out of Resende,” Ghosn said in an interview today in Rio. “We came to the conclusion that it would not be able to compete with the facility in Resende.”

Brazil’s vehicle sales have risen at least 10 percent each of the past five years, and the market is now the world’s fifth- biggest by volume. The country raised taxes last month on certain vehicles with less than 65 percent of parts and materials made in the country, the Mercosur free-trade area or Mexico, to limit imports of low-cost vehicles.

Nissan is based in Yokohama. Ghosn, who also leads Renault SA, yesterday said it plans a 212 million-euro ($283 million) expansion of a factory in Curitiba and aims to add 13 new models in Brazil from 2012 to 2016.

--With assistance from Jose Sergio Osse in Sao Paulo. Editors: Jamie Butters, Bill Koenig

To contact the reporters on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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