The Nihon Keizai Shimbun reported that Nissan plans to develop a global strategic vehicle with an engine displacement of about 1 liter targeted at China, India and other emerging markets.
The company reportedly will spend more than ¥100 billion (US$843 million) to produce about 600,000 units a year—nearly 20% of Nissan’s global sales— in these markets by 2009.
The low-priced strategic car will be the smallest among the vehicles developed by Nissan. It will likely sell for around US$10,000. The firm has already started developing a chassis, according to the report.
In China, affiliate Dongfeng Nissan Passenger Vehicle Co. will add a production line capable of turning out 100,000 of the vehicles a year. In India and Brazil, Nissan is considering using excess capacity at plants operated by its largest shareholder, Renault SA of France. The strategic vehicle will also be produced in Eastern Europe.
In 2004, 10.17 million vehicles were produced in the BRIC (Brazil, China, India and Russia) markets, up 17% on the year and representing 16% of global car output. Nissan lags behind Toyota, Honda and Suzuki in these four markets in terms of units sold.
Nissan’ plan to develop a strategic small car targeted at emerging markets is also aimed at reducing its dependence on the North American market, where it has increased earnings with high-margin vehicles such as small trucks and SUVs.