Nissan expects its North American business to be profitable in a 10.5 million market

Article by Christian Andrei, on August 27, 2010

The North American segment of Nissan Motor Co. estimates that it would only be profitable if the total US market has annual sales of 10.5 million vehicles, Executive Vice President Carlos Tavares said.

While attending the Tokyo Motor Show, Tavares gave in to requests for interviews and he said that currently, Nissan is using only about 60-70 percent of its North American production capacity.

Tavares said that Nissan's plants have reached a point where it can profit with a total U.S. market of 10.5 million vehicles.

The US market is widely expected to total 10.5 million units, down sharply from 16.2 million units in 2007 and 13.2 million last year. So far in 2009, Nissan was able to maintain its market share in the United States , unchanged from last year, even without the use of heavy, profit-eroding sales incentives.

Tavares said that even if dollar weakened against the Japanese currency to 80 yen, then the North American profitability at such a level would not be affected.

He said Nissan had been preparing for currency swings, noting Nissan's strategy of seeking low-cost sources for parts procurement around the world. Chattanooga Plant Manager Frank Fischer said that the Volkswagen brand can look back on a long tradition in the USA.

He considers the beginning of construction work on the new plant in Chattanooga as a new chapter in its joint history. Fischer said that long-lasting success came about as a result of strong products and a great team.

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