Nissan to built a $2 billion auto assembly plant in Aguascalientes, Mexico

Article by Christian Andrei, on January 28, 2012

Nissan Motor Co. will construct an auto assembly plant valued at $2 billion in Aguascalientes, Mexico – its third one in the country. This is part of Nissan’s goal to outperform rival Honda Motor Co. Initially, this plant will have a capacity for 175,000 light vehicles each year for the U.S., Mexico and Latin America but then there are expansion plans.

Production is set to start by the end of 2013. Nissan hasn’t revealed what model will be assembled at the plant initially but a company executive said that this will be "an existing B-segment nameplate” that is in short supply.

This implies that it will be building the subcompact Versa, which is being produced at an existing Nissan plant in Aguascalientes and is offered in the U.S. as well as in other markets. Nissan will add models as the capacity in this plant is increased.

Nissan operates another plant in Mexico, specifically in Cuernavaca. A model that has surpassed expectations is the redesigned Versa sedan that was launched last fall.

Nissan reported a 15% boost in U.S. sales and now owns an 8.2% share of the U.S. market in 2011. However, it now aims to get 10% of the U.S. market and seeks to outperform the Honda brand for the first time.

It also plans to transfer more vehicle production from Japan to North America. It aims to become the dominant Japanese automaker in Latin America. For this to be possible, it has to have a bigger factor space.

Nissan built 1.18 million light vehicles in North America in 2011. This is 16% higher than in 2010 and is just enough for it to surpass the output of Honda and Toyota. Typically, big auto assembly plants cost about $1 billion but the fact that Nissan plans to spend twice this amount in Aguascalientes proves just how serious it is.

Topics: nissan, mexico, factory

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