TRAVERSE CITY, MICH. -- With its financial turnaround well under way, Nissan Motor Co. now faces its next challenge of raising the output of its factories around the world.
Tadao Takahashi, Nissans executive vice president for manufacturing, says better plant utilization will be a driving issue for the next three years. Nissans plants used just 73 percent of their capacity in fiscal year 2001, which ended in March 2002, according to Takahashi. The company expects that rate to be 82 percent in fiscal 2005, which ends in March 2006.
The effort will be even more demanding because Nissan is in the midst of a capacity expansion. This year, Nissan added the Maxima sedan to its Smyrna, Tenn., assembly plant, and announced in June that it would produce the next-generation Pathfinder SUV there beginning in fall 2004.
Meanwhile, Nissan has just opened its Canton, Miss., factory, which will yield 400,000 cars and trucks a year by the time the company reaches its 2005 capacity target.
Nissan is also expanding production capacity in Mexico.
By increasing capacity utilization, we are able to increase production volume while reducing costs, Takahashi said Monday, Aug. 4, at the Management Briefing Seminars.
Factory utilization is a result of sales, and the plan reflects the new push by Nissan to increase its global sales volume by 1 million vehicles a year by 2005.
To supply that projected volume, Takahashi said output will increase around the world, although at different levels. In Japan, where Nissans utilization rate was 74 percent in fiscal 2001, Takahashi expects factories to hit almost full capacity, or 97 percent.
In North America, despite the addition of new plant lines, Nissan forecasts a rise from 77 percent utilization in 2001 to 87 percent in 2005.
The situation will change little for Nissan in Europe, according to Takahashi. Nissans factory output there will grow from 66 percent utilization in 2001 to just 68 percent in 2005.
Takahashi says Nissans new focus on plant flexibility will help improve utilization. The company is investing in new production systems that will allow a single line to build up to four models and eight body types at the rate of 60 jobs an hour.