Nissan Expects to Build U.S. Plant -- WSJ
January 17 2018 - 3:02AM
Dow Jones News
By Sean McLain
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 17, 2018).
DETROIT -- Nissan Motor Co.'s chief executive said the company
believes it will need to build a new plant in the U.S. in four or
five years, when the car maker would be ready for another push to
expand.
Normally, that plant would be built in any of the Nafta
countries, "but in the current situation we are more inclined to
invest in the U.S.," said Hiroto Saikawa, Nissan's chief executive,
at the Detroit auto show.
President Donald Trump has pressured Japanese auto makers to
build factories in the U.S. Last year, Mr. Trump tweeted "no way"
to Toyota Motor Corp.'s plants to import Corollas to the U.S. from
an under-construction plant in Guanajuato, Mexico.
Last week, Toyota Motor Corp. and Mazda Motor Corp. said they
would build a $1.6 billion plant in Huntsville, Ala. Toyota's plant
in Guanajuato will produce Tacoma pickup trucks, while the Alabama
plant will focus on passenger cars.
Nissan's plan comes as it eases off the U.S. market after years
of rapid expansion. Sales have grown to around 1.5 million units,
from one million units in 2011. That growth helped Nissan hit, and
exceed, its target for U.S. market share, but it came at the
expense of its profit goals.
"Now it is time for us to improve quality of sales, rather than
stretching volume. We have been hit with a deterioration of
profitability from the U.S.," Mr. Saikawa said.
Nissan has become increasingly reliant on the U.S. North America
once accounted for 30% of Nissan's profits. "Now 50% is dependent
on the U.S.," said Jose Munoz, Nissan's chief performance
officer.
The company is paying the price for being overly optimistic in
its predictions for the U.S. car market this year. Nissan ran its
plants at full tilt only to be hit by a sharp slowdown in car
buying over the summer.
The company's hopes to trim incentive spending and refresh its
aging passenger car lineup over the next few years to shore up its
U.S. business. Carlos Ghosn, who heads the alliance between Nissan,
Renault SA and Mitsubishi Motors Corp., aims to hit a combined
sales target of 14 million in 2022 for the three companies.
Mr. Saikawa isn't quite sure how they're going to get there just
yet. "We still need to brush up our plan. We are almost halfway
finished with this sustainable growth plan," he said.
On China, Nissan leadership is more sanguine. The company sells
about the same number of vehicles there as it does in the U.S., but
it plans to ramp up sales by an additional 1 million -- even at the
expense of profitability.
"We are strategically aggressive [in China], because now is time
for us to secure the battlefield for the future," Mr. Saikawa
said.
Write to Sean McLain at sean.mclain@wsj.com
(END) Dow Jones Newswires
January 17, 2018 02:47 ET (07:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.