Nissan Motor Co said yesterday it will invest more than 10 billion baht (US$250 million dollars) in Siam Nissan Automobile Co in Thailand over the next five years in an effort to increase sales in the ASEAN market.
"Thailand offers us great potential for growth. It could also present us with a strong base for exports to global markets, including ASEAN," Kosaku Hosokawa, president of Siam Nissan, said in a statement.
Through the investment, Nissan will expand its vehicle lineup and production capacity. It will also increase the number of employees at the Thai subsidiary to 4,000 from the current 2,000 by 2008.
Japan's second-largest automaker said it will introduce 10 new models to the Thai market by 2008. Siam Nissan's current lineup consists of six models but with the new lineup, its sales are expected to triple to 130,000 units by 2008.
Auto sales in Thailand rose 30 percent to 533,176 units last year from a year earlier. Nissan's sales in the Thai market were down 1.8 percent last year to 43,557 units, with 8.2 percent market share.
Nissan in April raised its stakes in Siam Nissan and Siam Motors & Nissan Co, its assembler, to 75 per-cent from 25 percent, bringing the companies under Nissan's management control. The company paid a total of 7.64 billion baht for the additional stakes.
Nissan said the new investment in the Thai subsidiary is under its three-year business plan, Nissan Value-Up, which goes into effect on April next year. The plan aims to increase annual global sales to 4.2 million units by 2008, up 40 percent from last fiscal year's 3 million units.
Separately, Mitsubishi Motors plans to provide financial support and will reorganize some of its 926 dealerships nationwide which were hit hard by plunging sales on recent cover-up scandals, a Japanese financial daily reported yesterday.
According to the Nihon Keizai Shimbun, Mitsubishi Motors president Hideyasu Tagaya told a small group of Japanese reporters on Thursday that the automaker is considering providing financial aid to struggling dealerships on a case-by-case basis.
One example of the support is extending payment deadlines for vehicle wholesale purchases, Tagaya was quoted as saying.
He also said that business mergers are "another option for these ailing dealerships."
Japanese dealers have reported severe sales declines in the last few months. According to the Japan Automobile Dealers Association, sales of Mitsubishi cars in Japan plunged 64.3 percent last month from a year earlier to just 4,885 units. The company's reputation worsened following a disclosure of its cover-up scandals to the public a few months ago. Mitsubishi systematically hid parts defects for many years in order to avoid costly recalls.
The cover-ups led to various car accidents, including two fatal mishaps in 2002. Ten former and current Mitsubishi executives have been arrested on charges of professional negligence in the cases.
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