Nissan Motor Co is planning to expand production at home by as much as a fifth, betting that a record batch of new models will spur sales in Japan.
Japan's third-biggest automaker will increase production in Japan by between 15 percent and 20 percent by March 2005, said President Carlos Ghosn. The plants now run at about 75 percent capacity, up from about half when Ghosn arrived from controlling shareholder Renault SA in 1999.
"We are going to have about 300,000 more cars to be sold in Japan," Ghosn said. "All the increase will come from Japanese plants."
Nissan's biggest rivals, Toyota Motor Corp and Honda Motor Co, both plan to rely on overseas factories for most or all of their extra production as they seek cheaper supply bases. Nissan, which aims to raise global sales by 40 percent, or 1 million vehicles, by March 2005, will have to grab a bigger share of the home market if it's to justify increased production, analysts said.
"It's quite difficult for Nissan to increase domestic sales by 300,000 units," said Shigeharu Kimishima, an analyst at Kokusai Securities Co. "If Nissan can increase its capacity utilization like Honda, it will be able to lower labor and depreciation costs per car."
Nissan challenged Toyota as the biggest Japanese automaker three decades ago before rising debt and slumping market share left it lagging in third place behind Honda in global sales. For the first half of 2002, Toyota led with a 42 percent of domestic sales, followed by Nissan's 19 percent and Honda's 15 percent.
Nissan's Ghosn said the company will increase domestic output to meet rising demand at home and abroad. The carmaker yesterday unveiled its new Z sports car bound for export markets and Japan, which will be built at its Oppama plant near Tokyo.
"I am not envisioning any time to import cars to Japan," Ghosn said. "One of our strategic decisions is that we want to make our base in Japan competitive."
Nissan, which shuttered five factories in Japan since 1999 to halt output of unprofitable models, built a total of 1.27 million cars in Japan in the year ended March 31, 2002, down 3.1 percent from the year earlier.
The maker of Altima cars expects domestic production to rise 5 percent this year to 1.34 million autos, while output abroad is likely to rise 16 percent to 1.39 million. Nissan plans to release six new models in Japan this year to help increase sales by 6 percent to 757,000 units, excluding minicars.
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