Wed, Jul 27, 2011 - Page 10 News List

Nissan, Dongfeng to invest US$8bn in China

AFP, BEIJING and JAKARTA

Nissan Motor CEO Carlos Ghosn speaks at a news conference in Beijing on the company’s plans to nearly double its annual sales in China by 2015.

Photo: Reuters

Nissan Motor and its Chinese partner, Dongfeng Motor Co (東風汽車), will invest 50 billion yuan (US$8 billion) and launch about 30 new models in China over the next five years, the Japanese auto giant said yesterday.

The two firms also plan to increase sales from nearly 1.3 million vehicles last year to more than 2.3 million units by 2015 and launch a fully electric zero-emission car for the Chinese market, Nissan said in a statement.

“Nissan’s strong partnership with Dongfeng Motor Corporation has been the primary driver of its robust growth over the past eight years in the Chinese market,” Nissan CEO Carlos Ghosn said in the statement.

“The new plan, with its investments in capacity, products and innovation, will ensure that China continues to be Nissan’s largest global market,” Ghosn said.

China, which overtook the US to become the world’s top auto market in 2009, has become increasingly important for global players. Auto sales in China rose more than 32 percent last year to a record 18.06 million units.

However, the sector has since lost steam after Beijing phased out sales incentives such as tax breaks for small-engined vehicles, introduced to ward off the impact of the global financial crisis.

The government is considering new incentives to revive the sector. Nonetheless, an industry group still predicted earlier this month that auto sales growth was expected to slow, despite showing a slight rebound last month.

Nissan said its Chinese joint venture planned to achieve and maintain a 10 percent share of the Chinese market over the next five years.

Ghosn told reporters at a press conference that Nissan currently has a 6.2 percent share of the market.

The two firms will also build a new manufacturing facility in the eastern province of Jiangsu, which will reinforce existing plants in other parts of the country to achieve the 2015 sales target, it added.

Sales of the first passenger vehicle sporting the Dongfeng Nissan brand Venucia are scheduled for next year, and a total of five new models will be launched under that brand.

Nissan also said yesterday it planned to invest US$320 million in Indonesia to more than treble production capacity at its West Java factory and set up a new engine assembly plant nearby.

“We plan to increase production capacity at the plant from 50,000 vehicles per year to 180,000 vehicles for each year by 2013,” Nissan Motor Indonesia vice president of sales and promotion Teddy Irawan said.

“This September we’ll complete the first phase of the capacity expansion to increase production from 50,000 units to 100,000 units. In the next phase, we’ll raise capacity from 100,000 units to 180,000 units,” Irawan said.

Indonesia, Southeast Asia’s largest economy, is seeking billions of dollars in foreign investment to help it achieve its target of 7 percent growth by 2014. It aims to attract private investment of up to US$465 billion by 2025.

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