Nissan vying for 3rd place in China with Dalian plant

TOKYO (Nikkei) -- With its decision to build its fourth plant in China, Nissan Motor Co. (7201) seeks to establish itself as the third-largest automaker in that market, after Volkswagen AG and General Motors Co.

Nissan's annual Chinese output capacity of about 1 million units beats the roughly 800,000 units of Toyota Motor Corp. (7203) and the 640,000 or so of Honda Motor Co. (7267). In raising this to more than 2 million units by 2015, Nissan aims to lift its share of sales to 10% from the current 6% or so.

The company is locked in fierce competition with South Korean firm Hyundai Motor Co. When subsidiary Kia Motors Corp. is included, the Hyundai group's annual output capacity in China comes to 1.03 million units. The group has announced a goal of raising the figure to 1.73 million.

In addition to constructing the Dalian plant, Nissan has decided to begin Chinese production of its Infiniti luxury vehicles at its Xiangyang plant in Hubei Province around next year. By broadening local output to range from mass-market to luxury models, Nissan aims to step up efforts to capture a bigger slice of what is now the world's largest auto market.

The Xiangyang plant produces the Teana mainstay midsize sedan. The Infinitis it makes will be similar in size to the Teana, enabling capital investment to be held down.

In its medium-term business plan through fiscal 2016, Nissan aims to triple worldwide Infiniti sales to 500,000 units. Meeting that target will require the firm to strengthen production capacity for this brand, since the mainstay Infiniti plant in Tochigi Prefecture has an annual output capacity of 220,000 units.

Nissan sees China becoming the biggest market for Infinitis by the end of fiscal 2016. In line with this, as well as expectations of sales growth in Asia, it transferred the brand's headquarters functions to its Hong Kong office April 1.

 (c) 2012 Nihon Keizai Shimbun America, Inc.