Nissan Plans New $2-Billion Plant in Mexico

Just the Facts:

• Japanese automaker Nissan continues to pour billions of dollars into new production capacity.
• The production expansion is intended to support the company's ambitious growth plans in North and South America.
• Nissan now controls 25 percent of the Mexican market and is growing rapidly in Latin America.

MEXICO CITY — Japanese automaker Nissan Motor said Wednesday it will invest $2 billion in a new assembly plant near its existing facility in Aguascalientes — part of a massive investment to support its ambitious long-term growth plans in North and South America.

The plant is expected to build a variety of subcompact models on Nissan's global B platform, which underpins such products as the popular Versa and the March.

There is also considerable media speculation in Japan and Mexico that German automaker Daimler, which has an extensive development pact with the Renault-Nissan alliance, may join in the Mexican assembly venture in the future.

Nissan has been growing rapidly in Mexico, where it currently builds 600,000 cars a year at two assembly plants and accounts for nearly 25 percent of local sales. It also is expanding rapidly in South America and recently announced plans to invest $1.8 billion with Renault in additional manufacturing capacity in Brazil.

Nissan joins fellow Japanese automakers Honda and Mazda in announcing new investments in Mexico. Honda is investing $800 million and Mazda $500 million in that country.

Nissan's new facility in Aguascalientes is slated to open in late 2013, and will have an initial capacity of 175,000 cars a year. Eventually, Nissan expects the plant to build 400,000 cars a year, pushing total Mexican production capacity to 1 million vehicles a year.

The new Resende plant in Brazil is expected to open by mid-2014.

Carlos Ghosn, chairman and CEO of Nissan and Renault, said: "Mexico is a key engine for Nissan's growth in the Americas. Together with our new plant in Brazil, this new manufacturing facility in Aguascalientes is an important pillar in our strategy to ensure that Nissan has the capacity it needs to increase sales volume and market share across the Americas."

Inside Line says: Look for Nissan to continue its aggressive expansion, especially in South America.