Nissan Motor Co and China’s state-owned Dongfeng Group (東風集團) yesterday announced plans to develop 20 electric vehicles (EV) as part of a US$10 billion, five-year investment program, adding to efforts by global automakers to create commercially competitive electrics for the biggest auto market.
The venture between the two firms is to start sales of Nissan’s all-electric Leaf and two other electric models this year, said Jun Seki, president of the joint venture, called Dongfeng Motor Group Co (東風汽車), adding that three “affordable EV” compacts will be launched next year.
“Our EV offensive starts from 2018,” Seki said.
Nissan joins global automakers including Volkswagen AG and General Motors Co that are looking to China to propel future revenue and are investing billions of US dollars to develop electric vehicles that will appeal to Chinese drivers.
The appeal of electrics in China still depends heavily on subsidies, but Beijing is pushing automakers to develop the technology. Automakers face quotas that require EVs to make up at least 10 percent of their sales starting next year.
Regulators are using access to China’s market as leverage to induce global auto brands to help local companies that might become future competitors develop EVs. Foreign automakers that want to manufacture in China must work through local partners, most of them state-owned, and must share or help develop technology to satisfy the sales quotas.
Overall, Chinese sales of sedans, SUVs and minivans rose 1.4 percent last year from 2016 to 24.7 million units. Total sales of pure-electric and gasoline-electric hybrids rose 53.3 percent to 777,000 units, but accounted for only 2.7 percent of the market.
Nissan and Dongfeng have said they plan to develop 40 new models — half of them electric or hybrid — over the next five years.
Those are to be sold under the Nissan, Dongfeng and Infiniti brands, as well as the partnership’s low-price Venucia name.
By 2020, the partners have set an annual sales target of 360,000 electric or hybrid vehicles, or about 30 percent of the total, Seki told reporters, adding that last year’s total sales were 21,000 units.
“We need to accelerate cost reduction,” Seki said. “But to reduce costs, we need more volume.”
Overall, the joint venture aims to increase annual sales by 1 million units to 2.6 million by 2020.
Nissan-Dongfeng sales of EVs have failed to gain traction due to the relatively high sticker price of its models, which contain up to 85 percent imported components, Seki said.
“We probably underestimated our competitors,” Seki said. “We need really heavy localization to compete.”
China is an important factor in Nissan’s goal to increase its annual global revenue from ￥12.8 trillion to ￥16.5 trillion (US$116 billion to US$150 billion) by 2022, Seki said.
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS