Jose Munoz, chairman of Nissan North America, has unveiled a four-prong plan to expand its capacity. This plan could help buoy the carmaker to achieve its goal of capturing 10 percent of the United States auto market well ahead of schedule and hike its operating profit margin in North America.
The plan, which includes greater supply of high-margin nameplates like the Murano crossover and Maxima sedan, would entail opening capacity in the US, Mexico, South Korea and Japan. “I think that we may see the 10 percent overachieved earlier than expected,” remarked Munoz.
Nissan, along with Infiniti, currently commands 8.4 percent of the US auto market. The additional US capacity will come from a squeeze of its assembly plants in Smyrna, Tenn., and Canton, Miss. Further supply could be tapped from Mexico as its new sites in Brazil have eased pressure from the country to supply vehicles to South America.
The Japanese carmaker will increase output of the Nissan Rogue crossover in South Korea for export to the US. As for next move, Nissan should be able to tap its underused capacity in Japan to fill in the supply gap. With the yen weakening, sales of Japanese exports have proven to be a profitable area for carmakers, and that should hold true for Nissan.
For instance, the carmaker’s Oppama assembly site has two lines, one of which is currently but can quickly be switched on. He said that Nissan has started to “work diligently” how it can capitalize on the available capacity in Japan for North America.
“Almost everything we need, we can get from Japan,” said. Munoz remarked that Nissan, even with its current manufacturing footprint and the additional capacity available in Japan, can achieve its goal of taking a 10-percent share of the US market. He expects a huge surge in regional profitability in 2015 as bigger, high-margin vehicles like the redesigned Murano and Maxima arrive.