Nissan is hiking output in Russia to offset effects of weak ruble

Article by Andrew Christian, on December 16, 2014

Nissan is increasing the number of vehicles it is building in Russia as it tries to offset a weakening ruble that is hurting its profits. The Japanese carmaker has recently commenced output of the X-Trail SUV at its St. Petersburg site this week and plans to start building the Qashqai at the plant next year. Nissan has expanded the site’s annual production capacity to 100,000 units thanks to a EUR167-million investment.

According to Colin Lawther, Nissan Europe's head of manufacturing, exporting the Qashqai to Russia from Sunderland, England, "is not as attractive as it once was." He remarked that the weakening ruble is causing "a lot of stress" to carmakers importing vehicles into Russia.

A Toyota Europe spokesman has admitted that the ruble’s decline is having a negative effect on the carmaker’s profitability in the region. Nissan considers Russia, along with the United Kingdom, as one of its biggest markets for the Qashqai. In fact, the Qashqai is Nissan’s second-bestselling model in Russia next to the Almera compact sedan.

In the first 11 months of 2014, Nissan sold 42,220 Almeras, 27,323 Qashqais and 22,251 X-Trails in Russia. Lawther noted that once Nissan commences output of the Qashqai in St. Petersburg at the end of 2015, the now unfavorable exchange rate will be of less impact.

Nissan plans to have 90 percent of its vehicles being sold in Russia to be locally built by 2016. Models now being built at Russia include the Murano and Pathfinder large SUVs, and the Teana midsize sedan. These models are eligible for the scrappage discount program that the government has initiated to support the auto industry.

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