Nissan Motor will soon join the bandwagon being led by Suzuki Motor Corporation as the company gears up to move production of a top-selling model to India and Thailand because of the cost advantage that these countries offer.
In a recent development, the company has decided to shift production of the Micra, the March subcompact for overseas markets, from the UK to India in 2010, when the vehicle is slated for a full makeover of its own.
The development comes at a time when the Japanese automaker is struggling to overcome falling car demand and a strong yen.
The company will also cease the production of its top-selling sub compact March in Japan in 2010 when the vehicle is due for a full remodeling. As part of its structural overhaul to cope with falling car demand and a strong yen, the company will, from 2010 onwards, produce March in Thailand and import all units for the domestic market from Thailand.
Nissan, which is widely expected to report an operating loss for the year ending March 31, sells about 47,000 March models a year in the domestic market.
Nissan, Japan?s third biggest automaker, had earlier announced plans to launch 60 new and redesigned models. But because of the slowdown in global demand, the company has scaled down its targets to 48, which will be introduced over five years starting in the current fiscal year ending March 31.
Not just this, the company also plans to postpone the opening of a plant in Morocco. The plant was expected to come up in association with Renault and was initially scheduled to become operational in 2010.
As part of Nissan GT 2012, the company?s new five-year business plan, Nissan had announced that it will compete in the entry-car market with a dedicated new A platform that will be used for at least three models, including the next generation of Micra, and will be built in five leading competitive countries (LCCs).
Production sites for this family of compact cars will include the new plant in Chennai, being constructed by the Renault-Nissan Alliance, the company had said in June last year. Following this announcement, the two partners had started construction of the Chennai plant, which will roll out vehicles carrying the French and Japanese automakers Renault and Nissan?s badges.
The facility, which will have an annual production capacity of up to 4 lakh units, is being set up at an investment of Rs 4,500 crore and will provide 4,000 and 12,000 jobs directly and indirectly once it goes operational in 2010.
The Chennai plant is one of the three joint production projects of the alliance – the other two being at Pune in Maharashtra (India) and Casablanca (Monaco).
Renault and Nissan entered into an alliance in 1999, linked by cross shareholdings. French carmaker Renault is the single biggest shareholder of Nissan Motor Co, Japan?s third biggest automaker, owning 44.3%, while Nissan, in turn, holds a 15% stake in Renault.