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Nissan launches expanded strategy for Brazil with new $1.4B manufacturing plant; Renault boosting production capacity there by 100,000 units

Nissan Motor Co., Ltd. plans to invest 2.6 billion BRL (US$1.4 billion) to construct a new manufacturing facility in Resende in the Brazilian state of Rio de Janeiro and develop, industrialize and launch new products. The Brazilian factory, scheduled to begin production in the first half of 2014, will have the capacity to produce up to 200,000 units annually of Nissan’s ‘V’ platform products for sale in Brazil.

Nissan partner Renault also announced an investment of 500 million BRL (US$276 million) to produce an additional 100,000 vehicles a year in its Curitiba, Brazil plant in 2013. The plant’s annual capacity will be increased to more than 380,000 units per year.

Nissan. The new plant is a major step in Nissan’s strategy as a leading automaker in the fast-growing BRIC (Brazil, Russia, India and China) markets. In June Nissan released details of its “Power 88” mid-term strategy, including plans to become the leading Asian automotive brand in Brazil—the world’s fourth largest auto market by volume—and attain at least 5% market share in the country by 2016.

Since 2001 Nissan has grown its presence and volumes in Brazil, Russia, India and China from less than 50,000 units to nearly 1.2 million units at the end of the company’s 2010 fiscal year. In Brazil, Nissan has grown significantly in the past two years, more than doubling its market share calendar year-to-date in 2011 to 1.7%.

Just as Nissan has demonstrated in China, Russia and India, we are investing in the regions with the most potential for growth. Brazil has clearly emerged as the engine of Latin American growth, and we look forward to contributing to Brazil’s economic landscape and its automotive manufacturing base in the 21st century.

—Carlos Ghosn, chairman and CEO, Nissan Motor Co, Ltd.

Resende was chosen fas the site for the new plant because of its proximity to the high-quality ports of Itaguai and Rio de Janeiro, a short time to start of production and good access to skilled labor and suppliers.

This new capacity will be incremental to Nissan’s existing capacity of 59,000 units annually from Renault’s plant in Parana state. That facility will continue to produce the Nissan Livina, Grand Livina, X-Gear and Frontier, while also expanding production of Renault models.

New product will prove central to the company’s ability to grow in the world’s fourth-largest auto market. Between today and 2016 Nissan will launch ten new products into the Brazilian market, increasing its market penetration from 23% prior to the launch of the Nissan March to more than 87% by 2016. In November Nissan will introduce the all-new Versa sedan to Brazil, increasing its market coverage to 83%.

Today Nissan operates 117 retail outlets throughout the country, with a plan to increase that number to more than 239 by 2016.

Renault. Renault aims to claim market share of 8% in Brazil by 2016, compared with more than 5% today. Along with India and Russia, Brazil is one of Renault’s three priority markets as part of “Renault 2016 – Drive the Change”.

In 2011, Brazil is set to become Renault’s second-largest market. Brazil is one of the cornerstones of our international growth strategy: more than one-quarter of the growth in volume will come from Brazil. If we are to reach this target, then we must increase our manufacturing capacity, and we have chosen our Curitiba plant to achieve this.

—Carlos Ghosn, President and CEO of Renault

The investments in Curitiba will also provide for the creation of an engineering center close to the production plants, whereas, today, the engineering personnel and establishments (Renault Technologies Americas – RTA) are scattered around the industrial complex. Renault do Brasil is to open a training center and new centers for logistics in order to make more rational use of storage areas. Renault has three plants in the Ayrton Senna complex at Curitiba: a passenger car plant, an LCV plant and an engine plant. Brazil exports vehicles to the other markets in South America.

Comments

HarveyD

This is a major investment and good potential growth for Nissan-Renault in Brazil. Brazil being one the future highest growth economy; (with China, India and Russia), it is one the best place to expand and try to capture a larger share of the internal markets.

GM, Ford, Toyota, Honda, Hyundai, Mercedes, BMW, Peugeot, VW, Fiat etc will do the same and move many factories into those four countries, with higher potential local markets and worldwide exports, in the next 10 years.

HarveyD

No comments from South of the Border?

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