Nissan mulls new plant in North America by 2017
Plans to produce 85% of vehicles for US Market in North America
Nissan aspires to increase its share in the U.S. market to 10% by the fiscal 2016. The company has plans to produce 85% of its U.S. market models in North America in 2015. Yen's high appreciation that lasted through the fall of 2012 has been corrected in mid-2013 but the company is going along with a production shift as planned from Japan to overseas. Nissan also plans to increase export from the United States. A third plant in Mexico is to start production by the end of 2013 but the company still sees need for more production capacity. Hence, Nissan is considering construction of a new plant in North America for production starting in 2017.
Nissan establishes mutual parts supply network in Japan, Korea and China (posted in July 2013);
US market: Continued growth spurs investment (posted in June 2013)
The Resonance concept car
(designed to suggest the new Murano model)
(exhibited at the North American International Auto Show in January 2013)
The Versa Note hatchback produced at Aguascalientes plant in Mexico and launched in the U.S. in June 2013
(exhibited at the North American International Auto Show in January 2013)
Sales in U.S.: Nissan plans to sell 1.27 million vehicles in fiscal 2013
Nissan launched new or renewed volume production models in 2012. It launched the Infiniti JX (renamed to Infiniti QX60) in March, the all-new Altima in June, the all-new Pathfinder, and the all-new Sentra in the fall. The Altima's annual sales topped 300,000 units for the first time.
However, the market launch of all-new models, taking place concurrently with the expansion of the production volume, caused confusion in the procurement networks. As a result, although Nissan's vehicle sales in the U.S. in 2012 expanded by 9.5%, it failed to catch up with the 13.4% growth of the light vehicle market in the U.S. and Nissan's market share declined from 8.2% to 7.9%.
Nissan's sales in the U.S. picked up in the first two quarters of 2013 thanks to the brisk sales of the Altima, Pathfinder, and Sentra in particular. As a result, Nissan's sales expanded by 8.1% with the market share increasing from 7.9% to 8.0%.
Nissan plans to launch four all-new models in 2013 including the NV200 (April 2013), Versa Note (June), Infiniti Q50 (summer), and Rogue (fall). These launch plans are backed by annual sales plans of 1.27 million units, up 11.6%, in the US and 1.61 million units, up 9.8%, in North America.
Nissan's vehicle sales by the U.S. model
|2008||2009||2010||2011||2012||Jan.-Jun. 2012||Jan.-Jun. 2013|
|G M||64,181 15,618||47,174 8,501||58,143 14,618||58,246 10,818||59,844 9,130||28,749 4,941||24,097 2,945|
|EX FX JX QX56||12,873 12,660 7,657||7,950 11,024 6,440||8,312 10,420 11,918||6,030 9,939 0 13,428||3,495 10,424 21,674 15,310||1,796 4,697 7,725 6,469||825 3,616 14,783 5,967|
|370Z Altima Cube||10,337 269,668 0||13,117 203,568 21,471||10,215 229,263 22,968||7,328 268,981 14,459||7,338 302,934 7,667||4,473 157,101 4,085||3,217 167,787 3,319|
|GT-R Juke Leaf||1,730||1,534 0 0||877 8,639 19||1,294 35,886 9,674||1,188 36,358 9,819||583 18,728 3,148||624 17,778 9,839|
|Maxima Sentra Versa||47,072 99,797 85,182||53,351 82,706 82,906||60,569 94,065 99,705||58,737 114,991 99,730||59,349 106,395 113,327||30,104 55,984 60,919||23,675 66,439 63,761|
|Nissan Div. car||513,786||458,653||526,320||611,080||644,375||335,125||356,439|
|Armada Frontier Murano NV||15,685 44,997 71,401||9,903 28,415 52,546||19,344 40,427 53,999 0||18,331 51,700 53,626 6,444||18,072 55,435 51,675 10,179||9,474 29,385 27,179 4,885||7,381 29,316 20,587 6,173|
|NV200 Pathfinder Quest||33,555 18,252||18,341 8,437||21,438 177||25,935 12,199||42,621 18,275||0 15,350 10,743||1,081 46,539 6,949|
|Rogue Titan Xterra||73,053 34,053 33,579||77,222 19,042 16,455||99,515 23,416 20,523||124,543 21,994 18,221||142,349 21,576 17,222||71,838 10,679 8,686||79,051 8,852 10,108|
|Nissan Div. truck||324,575||230,361||278,839||332,993||377,404||188,219||216,037|
|Total Nissan Div.||838,361||689,014||805,159||944,073||1,021,779||523,344||572,476|
|Market share US Light vehicles||7.2% 13,245,718||7.4% 10,431,509||7.8% 11,589,844||8.2% 12,779,007||7.9% 14,492,398||7.9% 7,272,541||8.0% 7,820,966|
Nissan vehicles sold in the U.S.
|Domestic Import||689,497 261,853||529,564 240,539||620,845 287,725||685,064 357,470||768,784 372,872||390,292 187,429||454,365 170,344|
|Domestic ratio Import ratio||72.5% 27.5%||68.8% 31.2%||68.3% 31.7%||65.7% 34.3%||67.3% 32.7%||67.6% 32.4%||72.7% 27.3%|
Note: "domestic" in the table means the U.S, Canada, or Mexico. Source: Automotive News
Major all-new models launched in 2012-2013
New technologies adopted in the Infiniti Q50 (to be launched in the summer of 2013)
|Infiniti Q50||Four-cylinder turbocharged engine and diesel engine||A number of new technologies are adopted in the Infiniti Q50 to be launched in the United States in the summer of 2013. Early models will be equipped with the V6 3700cc engine as is the previous model. Models powered by a four-cylinder turbocharged engine or a diesel engine will also be available after two years or so (Diesel version will initially be sold in Europe exclusively).|
|Turbo-engines and diesel engines are in high demand on luxury models today and, in Nissan's view, will help expand the Q50 sales. Nissan is expected to leverage the Renault-Nissan-Daimler partnership and receive these two engine technologies from Daimler.|
|Steer-by-wire system||The Infiniti Q50 will be the world first vehicle equipped with the steer-by-wire feature option with the trade name for "Infiniti Direct Adaptive Steering". The Nissan Infiniti will be the first volume production model with this feature. The new steering system transmits the driver's intention to the wheels faster than the mechanical steering system. This leads to more accurate control of the tire angles and steering maneuver.|
|The Q50 incorporates three independent electronic control systems for fail-safe sake. It also has the conventional mechanical system which is activated when needed in an emergency situation.|
|1.2GPa-class ultra-high tensile material||It is known that increasing the strength of high-tensile steel material generally lowers its ductility and makes it hard to form it into complex shapes. As a result, its use has been limited to certain parts in automobiles. Nissan has developed a 1.2GPa-class formable ultra-high tensile material for making parts of complex forms. The Infiniti Q50 is the first application of the new material in the world. The body weight has been reduced by 24 pounds (approx. 11kg).|
Other major all-new models
|Infiniti JX (Infiniti QX60)||March 2012||A twin model of the Pathfinder, the Infiniti JX is a 3-row, 7-seater SUV (front-wheel drive with a monocoque body) produced at Smyrna plant (first Infiniti-brand model produced outside Japan). Nissan aspires to sell 70,000 units a year in the near future topping the EX and FX that suffered sluggish sales. The model name has been changed to the Infiniti QX60.|
|(Notes) 1.||Starting with the 2014MY, the model name of the Infiniti models will have a prefix of "Q" for passenger cars and "QX" for SUV/Crossover vehicles. For example, the G Sedan will be Q50, the G Coupe and Convertible will be Q60, the M will be Q70, the EX will be QX50, the JX will be QX60, the FX will be QX70, and the QX56 will be QX80.|
|2.||The model names were changed to prepare for future introduction of new models.|
|Nissan Altima||JUNE 2012||The all-new Altima was unveiled at the New York Auto Show in April 2012 and released for sale at the end of June 2012. Equipped with an inline four-cylinder, 2.5-liter engine or V6 3.5-liter engine and the new-generation CVT. The four-cylinder model has the EPA fuel efficiency of 27 mpg city/38 mpg highway/31 mpg combined.|
|Nissan Pathfinder||October 2012||The all-new Pathfinder's body structure was changed from the body-on-frame to unibody structure. The V6 4000cc engine was replaced by the V6 3500cc engine of better fuel performance and the automatic transmission was replaced by the CVT. As a result, the car's fuel efficiency was improved from 15 city/22 highway to 20 city/26 highway.|
|Nissan Sentra||October 2012||Slightly larger in size than the previous model, but the fuel efficiency (CVT version) has been improved from 27 city/34 highway to 30 city/39 highway. The interior and equipment have been upgraded to compete directly with the Toyota Corolla and Honda Civic. Unlike the earlier models, the new Sentra is designed with lines that are common to the mid-sized Altima sedan.|
|NV200||April2013||A small-sized commercial van that shares the B platform with the Sentra, equipped with a 2000cc engine and produced at Cuernavaca plant in Mexico. This market used to be nearly dominated by Ford Transit Connect. Chrysler is releasing, for sale in the U.S. in the fall of 2013, the Ram ProMaster (produced in Turkey) based on the Fiat Ducato van.|
|2013||Nissan has been chosen as the exclusive provider of the passenger car type van for New York city taxi fleet starting in the second half of 2013.|
|2014||OEM supply for GM is slated to start in the fall of 2014. Sold by GM in the U.S. and Canada under the model name of Chevrolet City Express.|
|Versa Note||June 2013||The 2014 Versa Note (hatchback) is a successor to the Versa Hatch. Unlike the earlier model that was based on the B platform, the new model is based on the V platform as is the Versa sedan. Equipped with a 1600cc engine. The CVT version has achieved high fuel efficiency of 31 mpg city/40 mpg highway/35 mpg combined. Produced at the Aguascalientes plant in Mexico.|
|The Versa Note base model (5MT version) has the ex-plant price of 13,990 dollars, 2,000 dollars higher than the Versa sedan. According to Nissan, the Versa sedan is designed pursuing fuel economy while the Versa Note pursues the fun of driving and comfort as well.|
|Nissan Rogue||Autumn 2013||A small-sized Crossover based on the C platform sold under the model name of Rogue in North America, Qashqai in Europe, and Dualis in Japan. The next-generation Nissan Rogue will be designed according to CMF (Common Module Family) as is the next Qashqai and X-trail.|
|The current model of the Rogue is produced at the Kyushu plant in Japan. The all-new Rogue will be produced at the Smyrna plant in the United States. It will be produced also at Renault Samsung's Busan plant in Korea, and exported to the United States in an annual quantity of around 80,000 units.|
Doubling vehicle sales per dealership to win a 10% market share in the fiscal 2016
Nissan will strengthen its sales structure along with the product value to win a 10% market share in the United States. Its goal is to top Honda in the vehicle sales race.
The company aims to double the vehicle sales per dealership in key areas by the fiscal 2016 (year ending March 2017). Compared with the market leaders in the United States, Nissan is failing to fully exert its potential. The company is convinced that it could achieve the medium-term goal of 10% U.S. market share by raising the "operational performance level."
Strengthening dealer network to double vehicle sales per dealership
|Nissan's dealers in the United States each sold 959 vehicles in average in 2012, falling behind Toyota Scion (1,491 units) and Honda (1,220 unit). In addition, there exists a large regional gap among Nissan's dealers themselves. Dealers in the western region already have 10% share while those in the mid-west only have a little over 5% share.|
|Nissan intends to define 40 key areas in the United States where a share increase is more likely than others and double the vehicle sales per dealership in those areas by the end of March 2017. Nissan also plans to increase the number of dealerships in those areas. The company is confident about the share increase by conducting more detailed sales management to meet regional conditions and drawing out Nissan's potential to the full extent.|
|Most Nissan dealers are also selling several brands other than Nissan. The company will continue efforts to build closer relations with its dealers and improve the "dealer share of mind" so that they will concentrate more on selling Nissan vehicles.|
Source: Automotive News Apr. 1, 2013/May 6, 2013/May 13, 2013/Jun. 10, 2013
Lowering the suggested price by 580 to 4,400 dollars on seven makes
|In early May 2013, Nissan reduced its MSRP (manufacturer's suggested retail price) on seven Nissan-brand vehicles (Altima, Sentra, Maxima, Rogue, Juke, Murano, Armada). The price cut ranges from 580 dollars (Altima) to 4,400 dollars (Armada).|
|Potential customers looking for information on the Internet tend to shy away, from a discount brand, if they see a large gap between MSRP and the actual retail price. The car's residual ratio is also rated higher since the lease residual value is calculated according to the MSRP rather than the actual retail price.|
|According to Nissan, the price revision has nothing to do with the recent depreciation of yen as four out of the seven makes are produced in North America. The other three (Rogue, Juke, Murano) are currently imported from Japan but Nissan has plans to shift production of the Rogue and the Murano to the United States in the near future.|
Source: Automotive News May 6, 2013
Production structure: Considering new plant in North America by 2017
Nissan's four plants in North America (two in the U.S., two in Mexico) are currently operating to full capacities under the pressure of a series of new model launches, sales expansion in the U.S., Mexico and Brazil, and preparing for the site transfer of production from Japan. A three-shift operation started in the fall of 2012 at Smyrna plant (first occasion at the Smyrna plant).
Nissan's plans for immediate future (mid-2013 and on) include the start of production of the Rogue at the Smyrna plant (transferred from the Kyushu plant in Japan) in the fall of 2013, start of operation at the third plant in Mexico toward the end of 2013, and start of production of the Murano at the Canton plant (transferred from the Kyushu plant) in 2014.
Nissan is set to increase the ratio of its North American production of its vehicles sold in the United States to 85% by 2015 (72.7% in January - June 2013). The company further plans to increase its export from the United States and is currently studying the feasibility of building a new plant in North America for production starting in 2017.
Nissan's production in North America by the plant
|2008||2009||2010||2011||2012||Jan.-May 2012||Jan.-May 2013|
|Smyrna||Car Lt. truck||161,031 71,825||118,626 74,235||175,651 106,254||216,656 117,228||234,724 176,739||172,901||197,012|
|Canton||Car Lt. truck||212,851 103,037||140,467 40,970||171,216 57,748||168,453 60,878||172,058 61,418||102,338||127,855|
|Cuernavaca||Car Lt. truck||125,473 47,906||95,253 32,196||121,987 50,251||168,180 78,111||185,007 114,317||118,297||101,571|
|N.A. Grand Total||1,008,644||729,712||1,017,359||1,170,302||1,328,459||563,354||615,223|
|Sources : Ward's Automotive Reports|
|(Notes) 1.||"Lt." in the table is the abbreviation of "Light."|
|2.||Nissan changed production roles of its two plants in the U.S. in the fall of 2012. Starting in the fourth quarter of 2012, the all-new Sentra is produced at the Canton plant in the U.S. in addition to the Aguascalientes plant in Mexico. Production of the Frontier Pickup and the Xterra SUV was transferred in November from the Smyrna to the Canton plant. Production of all body-on-frame models is now concentrated in the Canton plant.|
|3.||Production of the Infiniti JX (QX60) started in early 2012 at the Smyrna plant. Production of the all-new Altima and Pathfinder started in the fall of 2012 in a three-shift operation (first occasion at the Smyrna plant). Nissan has announced plans to transfer production of the Rogue from the Kyushu plant in Japan to the Smyrna plant in the fall of 2013 at the time of switchover to an all-new model.|
|4-1.||Nissan announced a decision to transfer production of the Murano SUV from the Kyushu plant to the Canton plant in the United States starting with the all-new model being introduced in the second half of 2014 (announced in January 2013).|
|4-2.||Nissan will convert the Canton plant into an export base of the Murano to 116 countries around the world. It will expand the suppliers park near the plant and construct new buildings within the plant's premises where suppliers are invited to operate with the goal of reducing the cost of procurement and enhancing quality management.|
|5.||Nissan has plans to expand export of its vehicles produced in North America. The Altima is already exported to 45 countries and regions and the company plans to secure supply quantity and expand its exports. According to Nissan, export expansion of the all-new Sentra is also highly likely.|
|6.||As for the Infiniti brand, Nissan has plans to introduce a new volume production model, smaller in size than the Q50, by 2017. It has been reported that Nissan is considering a new production facility with a capacity of 100,000 vehicles in the United States or Mexico to meet the new demand (reported as part of the new plant construction vision in North America).|
Production models at plants in North America
|Smyrna||550,000||Altima, Maxima, Pathfinder, Infiniti JX (QX60)(from early 2012), EV Leaf (from early 2013), Rogue (from fall of 2013),(Production of lithium-ion battery started at the end of 2012.)|
|Canton||400,000||Altima, Sentra (from Q4 of 2012), Titan, Armada, NV2500, Xterra (transferred from Smyrna in Nov. 2012), Frontier (transferred from Smyrna in Nov. 2012), Murano (from second half of 2014)|
|Aguascalientes||600,000||Sentra, Tiida, Versa, Versa Note,|
|Cuernavaca||Tsuru, Versa, NV200, NV200 taxi (from 2013), Frontier, Chevrolet City Express (based on NV200, from 2014)|
|Third plant in Mexico||175,000||Vehicle based on B platform (from 2013)|
(Note) In July 2012, Nissan invested 2 billion dollars to start construction of a third plant in the state of Aguascalientes, Mexico (this will be the second production site in the state of Aguascalientes). The new plant will start producing 175,000 units a year of the "small-sized vehicles based on the B platform" (starting with the Versa) from the end of 2013. Nissan has medium-term plans to increase its capacity in Mexico from 600,000 to over 800,000 units.
2013 Nissan LEAF: Lowering base price by 6,400 dollars to 28,800 dollars
Nissan invested up to 1.7 billion U.S. dollars (subject to up to 1.4 billion dollar low-interest loan from the U.S. Department of Energy) and started production of lithium-ion batteries at the Smyrna plant in December 2012. It was followed by production of the Leaf EV in January 2013 to be powered by the batteries supplied from the same plant.
The basic model of the 2012 Nissan Leaf, the SV grade, has the price tag of 35,200 dollars. The new 2013 Nissan Leaf comes with the available S grade, whose price is reduced drastically by 6,400 dollars to 28,800 dollars (without the car navigation and telematics service system feature of the SV grade). The price is further reduced to 21,300 dollars after the federal subsidy of 7,500 dollars, and even to 18,800 dollars in certain areas after the applicable state subsidy of 2,500 dollars. According to Nissan, the new 2013 Nissan Leaf can well compete with gasoline-fueled vehicles of the same class.
The Leaf sales in January-June 2013 more than tripled from 3,148 units sold in the same period a year earlier to 9,839 units.
In April 2013, Nissan also reduced the price of the basic model, S grade, by approximately 280,000 yen in Japan to approximately 2.2 million yen after the government subsidy. According to Nissan, the price reduction represents a measure to accelerate the market penetration of electric vehicles.
Starting U.S. production of the Leaf, reducing the price and extending the battery warranty
|Local production of lithium-ion batteries||In December 2012, Nissan's lithium-ion battery manufacturing plant was built within the premises of the Smyrna plant in Tennessee, U.S., was put into operation. This marks Nissan's third lithium-ion battery plant across the world after the first two located in Japan and the U.K. The new plant can make enough batteries for 200,000 units of the Leaf EV a year. Electrodes will be imported from Japan and assembled with other parts that are procured locally. According to Nissan, the new plant in Tennessee is the largest plant in the United States for making lithium-ion batteries for automotive application.|
|Nissan will invest 1.7 billion dollars in total if deemed necessary to increase the battery and the Leaf production to the plant's full capacities. The investment is subject to up to 1.4 billion dollar low-interest loan from the U.S. Department of Energy.|
|Local production of Leaf EV in the U.S.||Production of the Leaf EV started at the Smyrna plant in January 2013. The plant can produce up to 150,000 units of the Leaf a year. The EV Leaf is made on the same assembly line as the Altima and the Maxima, and therefore the production mix can be changed flexibly according to the market demand. The motors are manufactured at Nissan's Decherd powertrain plant also in Tennessee, U.S.|
|New S grade priced at 28,800 dollars||A new grade with the price tag of 28,800 dollars (S grade) has been added to the 2013 Nissan Leaf lineup produced in the United States. This represents a drastic price cut of 6,400 dollars from the basic model, SV grade, priced at 35,200 dollars (excluding transport cost). The S grade is offered without the "navigation system with CARWINGS telematics" feature. Other available grades include the SV (3,380 dollars reduced from the 2012 model to 31,820 dollars) and the SL (reduced by 2,140 dollars to 34,840 dollars).|
|The price is further reduced to 21,300 dollars after the federal subsidy of 7,500 dollars. The car purchase is also applicable for local subsidy. For instance, the price is further lowered to 18,800 dollars in California where a 2,500 dollar state subsidy applies. According to Nissan, the S grade can well compete with gasoline-fueled vehicles of the same class.|
|Lithium-ion battery quality warranty extended||In addition to the ordinary warranty for a Nissan vehicle, Nissan offers warranty for the lithium-ion batteries mounted on the Leaf EV. The battery warranty includes five-year, or 60,000 mile coverage against battery capacity loss (below approximately 70%). In addition, an eight-year or 100,000 mile warranty for battery material or manufacturing defect was added in 2012.|
|New "battery change plan" introduced in 2014||Nissan has announced plans to conduct a global survey with the Leaf users and potential users and introduce a new "battery change plan" in the first half of 2014 accordingly. With a monthly fee of 100 dollars, the participating customers can have their lithium-ion battery packs replaced with new ones.|
|Lithium-ion battery technology is improving constantly. With the battery change plan, new batteries reflecting the latest technologies can be mounted on former Leaf models.|
|In Nissan's view, most Leaf customers will not need the battery change service. But the company is introducing it to give an extra feeling of peace of mind to the customers.|
|Market penetration of chargers||Nissan is promoting the installation of EV chargers. The company has defined key areas including California, Seattle, Portland (Oregon) and Washington D.C., and appointed five full-time personnel whose responsibility is to promote the installation of chargers, especially the quick chargers capable of 80% charge of the battery pack on the Leaf in thirty minutes.|
|Nissan estimates there are about 160 quick chargers installed for public convenience in the United States as of January 2013. Its immediate goal is to install quick chargers in 500 additional locations by mid-2014. The chargers cost approximately 18,000 dollars (quick chargers) and 2,500 dollars (220V chargers that require several hours for charging).|
|(Notes) 1.||With regard to the Leaf sold in Japan, (1) it was facelifted in November 2012 and the S grade was introduced with the price more than 400,000 yen lower than the basic X grade; (2) in April 2013, the prices of the three grades were reduced by approximately 280,000 yen each. The S grade is subject to a government subsidy of 780,000 yen and can be purchased for an after-subsidy price of approximately 2.2 million yen.|
|2.||The Renault Zoe EV launched by Renault-Nissan in early 2013 sold approximately 6,000 units in Europe by the end of June. The group announced that their EV sales in the world had topped 100,000 units (estimate) as of the end of June.|
Expanding hybrid vehicle lineup
Nissan is making available a "front-wheel drive, one-motor, two-clutch hybrid system" with the Nissan Pathfinder/Infiniti QX60 to be launched in the United States in the summer of 2013. This will be followed with the Infiniti Q50, Nissan Altima and virtually all other models in the company's HV lineup expansion scheme.
Hybrid vehicles extending through the entire product lineup
|In December 2012, Nissan announced plans to launch 15 new hybrid models by the end of the fiscal 2016 as part of its environmental strategy. In the company's view, "We can't just jump from internal combustion engines to zero emissions. We need something in between." The hybrids will be introduced through the entire lineup rather than with a small number of specific models to meet the fuel efficiency requirements prevailing in 2015 and thereafter.|
|Nissan currently has three hybrid systems: the rear-wheel drive, one-motor, two-clutch system, the front-wheel drive, one-motor, two-clutch system, and a simplified version called the "smart simple hybrid system" which is used on the Serena minivan. Nissan plans to use these three HV systems selectively according to the vehicle size and characteristics. Introduction of the plug-in hybrid system is also planned.|
|Hybrid systems will most likely be available also with the Infiniti Q50 (successor to the Infiniti G) to be launched in the summer of 2013. Nearly 70% of the Infiniti-brand vehicles sold in the United States are of the AWD type, which will be available with the Q50 HV as sell. The Infiniti M HV is Nissan's only hybrid vehicle currently available in the United States. It accounts for only 5% of the Infiniti sales for lack of the AWD feature.|
|Nissan is producing lithium-ion batteries for the Leaf EV in Japan, the U.S. and the U.K. The batteries for EV can be used on HV as well after partial modification, and Nissan believes the globally scattered supply will prove to be most helpful in the company's HV launch plan.|
Source: Nissan's press release dated Mar.28, Automotive News Oct. 22, 2012/ Dec.17, 2012/Jan. 21, 2013
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