Nissan raises production capacity in China

Zhengzhou Nissan Company Ltd. (ZNA), Nissan's local partner in China, on September 20 hosted the inauguration ceremony for its second plant in Zhengzhou, Henan Province, China.

Joining Nissan CEO Carlos Ghosn for the inauguration ceremony were an estimated 400 guests, including representatives of Henan Province, Zhengzhou City and affiliated companies, as well as employees.

"The start of production at Zhengzhou Nissan's second plant is a significant step forward because this plant is a tangible symbol of our growth strategy and the demanding goals we have set in China. Our investment in Zhengzhou Nissan's second plant will also help strengthen the economy of the Zhengzhou City area," said Ghosn. "And because we expect to build cars with a high level of localization, production here will promote the growth of local suppliers in the Zhengzhou area, contributing to a more robust automotive industry in this region."

Annual production capacity of the two ZNA plants will increase to 200,000 units from the current capacity of 60,000 units. With the additional investment and plant expansion, FY 2012 production is planned to reach 240,000 units. As a result, Nissan's annual production capacity in China expands from the current 670,000 units to 1.2 million units in FY 2012, once production from other facility expansion projects is added, including a second facility in Dongfeng Nissan's Huadu Plant.

Incorporating Nissan's global standards, ZNA's second plant will feature the most-advanced production facilities. The facility will produce two SUV models – X-Trail and Qashqai – which are currently produced in Dongfeng Nissan's Huadu Plant in Guangzhou City, Guangdong Province. With the increased production capacity, ZNA and Dongfeng Nissan's Huadu Plant, which currently has annual capacity of 360,000 units, will be two major production bases supporting the company's business in China.

Total investment in the construction of the second ZNA plant is approximately RMB 1 billion (12.3 billion yen). Additional investment and expansion are under discussion. With the start of operations, approximately 1,400 jobs will be created which will contribute to the economic development in Henan Province and Zhengzhou City.

Nissan's sales target in the Chinese market for calendar year 2010 is 860,000 units, including import models. Strong sales of Teana and Sylphy (passenger vehicles) and the recently launched NV200 (commercial vehicle) contributed to total sales of about 660,000 units for the year through August.