MEXICO CITY -- Nissan Motor Co. Ltd. said Monday that it would invest $300 million in a new plant in central Mexico to make advanced fuel-efficient transmissions.
Nissan's transmissions unit Jatco Co. said in a statement it would begin producing continuously variable transmissions, call CVTs from 2005 at the plant in the state of Aguascalientes.
The plant initially would produce 300,000 transmissions a year for the Mexican, U.S. and Canadian markets, Jatco said.
"In the expectation of an expansion in future demand for CVT technology, it is anticipated that capacity will increase to more than 700,000 units in the future," said Jatco, which is 82 percent owned by Nissan.
Unlike automatic transmissions, which shift between several fixed gear ratios, CVTs can change speed smoothly and cut fuel consumption by about 10 percent compared with vehicles using automatic gearboxes.
Nissan operates two plants in central Mexico, selling 60 percent of the cars produced there to the Mexican market.
On June 5, a source close to the deal said Jatco would produce CVTs in Mexico but provided few details.