Bloomberg News

Nissan Says It Will Fight Yen by Boosting Use of American Plants

January 12, 2012

(For coverage of the Detroit auto show, see SHOW <GO>.)

Jan. 11 (Bloomberg) -- Nissan Motor Co., Japan’s second- biggest carmaker, plans a record 85 percent of the vehicles sold in North and South America to come from plants in the region by 2015 to reduce losses from the yen.

Meeting the production targets at plants in the U.S., Mexico and Brazil, which last year supplied about 70 percent of Nissan models sold in the two continents, would ensure higher profit and stability, Bill Krueger, vice chairman of Nissan’s operations in the Americas, said today at the Automotive News World Congress in Detroit.

“Localization will be key to growing profitably in the Americas, and will protect Nissan against the sort of wide-scale supply chain disruption like we saw with the earthquake and tsunami of March 11,” Krueger said.

Plants in the Americas built 1.2 million cars and trucks last year, and the company is working to increase the volume to 2 million, he said.

Carlos Ghosn, chief executive officer of Nissan and affiliate Renault SA, said in an October interview that Japanese automakers would continue shifting production outside their home country because of the appreciating yen. Japan’s currency has risen 8.2 percent against the dollar in the past 12 months, the strongest performer against the 16 most-traded currencies tracked by Bloomberg.

Nissan last year began construction of a plant in Brazil, and the company has said it seeks to build a third auto-assembly factory in Mexico, where it has capacity to produce 700,000 vehicles a year. Details of an expansion in Mexico may come within weeks, Ghosn said in a Jan. 9 interview in Detroit, without elaborating.

A new factory is needed as the two already in operation are “completely full,” Krueger said. “They are at the point where this is just no room to grow,” declining to say what products will be built there.

Nissan’s North American operations are based in Franklin, Tennessee.

--Editors: Young-Sam Cho, Bill Koenig

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

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


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