Nissan may speed up Brazil plans after Mexico deal, Ghosn says
Ghosn: "This limitation of exports from Mexico to Brazil makes our Brazilian plant even more necessary."
TOKYO (Bloomberg) -- Nissan Motor Co. may accelerate plans to expand in Brazil after Latin America's biggest automobile market decided to scale back imports from Mexican factories.
The deal between Latin America's two biggest auto markets means "the ramp-up of the Brazilian plant has to be even more faster than what we are envisioning," Nissan President Carlos Ghosn, who was born in Brazil 58 years ago, said in an interview Monday in Japan.
"This limitation of exports from Mexico to Brazil makes our Brazilian plant even more necessary."
The comments signal Nissan's increased urgency to add production in Brazil, where the company plans to spend 2.6 billion reais ($1.4 billion) quadrupling annual capacity by 2014, after Mexico agreed to cut exports to the country by as much as 30 percent for the next three years.
Sales of light vehicles in Brazil, which overtook Germany in 2010, may climb to 3.8 million units by 2014, according to estimates at Macquarie Group Ltd.
"It's positive for Nissan to speed up its expansion in Brazil," said Takashi Aoki, senior fund manager at Mizuho Asset Management Co. in Tokyo. "It indicates Nissan is exercising good foresight."
Nissan is more affected than Honda Motor Co. and Mazda Motor Corp. by the trade agreement, according to Credit Suisse Group AG estimates this month.
Nissan currently brings in the bulk of the vehicles sold in Brazil from Mexico, where its annual production of 600,000 vehicles is 10 times the capacity in Brazil. The carmaker plans to begin production at an assembly plant in Rio de Janeiro in 2014 to add 200,000 vehicles in annual capacity, according to the company.
In terms of earnings, Ghosn said he expects 2012 to be a "much better year" than 2011 on expectations that the industry won't face the types of natural disasters it struggled through last year and because monetary policy may ease.
Nissan is forecasting the highest profit among Japanese carmakers for the fiscal year ending March 31 after it recovered faster than Toyota and Honda from the Japan earthquake and Thailand floods during 2011.
Under a six-year plan disclosed last year, Nissan plans to raise its global market share to 8 percent by March 2017, compared with 5.8 percent in March 2011. The plan includes a goal to grab about 10 percent of global luxury-vehicle sales by tripling sales of Nissan's Infiniti vehicles to 500,000 units.
With low-end cars, the company revived the Datsun brand this month after three decades, initially targeting entry-level customers in Russia, India and Indonesia from 2014. While Datsun will initially sell in those three markets, Nissan plans to subsequently make the brand available globally, Ghosn said.
Ghosn, who's also CEO of Renault SA, also reiterated his expectations for the French carmaker and Nissan to reach an agreement soon to buy a majority stake in OAO AvtoVAZ, Russia's largest carmaker.
Negotiations on the price are "practically finished," he said. Renault already owns 25 percent of AvtoVAZ. Philippe Klein, head of product planning at Renault, said this month the French carmaker is making use of AvtoVAZ's facilities to develop vehicles for Russia -- where car and light-truck sales last year rose 39 percent to 2.65 million vehicles, surpassing France as Europe's No. 2 automobile market, according to data compiled by Bloomberg Industries.Contact Automotive News