In a bid to tap the growth opportunities the American markets have to offer, Nissan Motor Co. Ltd. (NSANY) is aiming to take its production capacity in the region past 2 million units in 2014. Nissan also wants to minimize the adverse effects of currency translation.
The boost in production is supported by enhanced capacity at its U.S. plants and the new facilities in Mexico and Brazil. To boost production, Nissan is investing $5 billion for the new plants and to increase its manufacturing capacity. The company is also appointing 10,000 employees to support the expansion strategy.
Nissan has dominated Mexico’s market for 50 months at a stretch and its $2-billion worth manufacturing complex, supplier park and quality proving ground in Aguascalientes will most likely solidify its position. The manufacturing complex is initially expected to produce 175,000 units of Nissan's B platform products annually. This increase will well complement the automaker’s existing manufacturing facilities in Aguascalientes and Cuernavaca.
Nissan is also expanding its footprint in Brazil with a $1.5 billion manufacturing facility in Resende. This plant will likely produce 200,000 V Platform vehicles annually once the production starts in the first half of 2014. Moreover, the automaker will be producing 4-cylinder gasoline engines for Infiniti and Mercedes-Benz models at its Renault-Nissan Alliance powertrain plant in Decherd, Tenn. from early 2014. This is a joint venture with Daimler AG (DDAIF). The plant has a capacity of 250,000 units per year.
Nissan Motor is one of the largest automakers in the world. The company, along with its subsidiaries, engages in the production and sale of automotive products, industrial machinery and marine equipment, primarily in Japan, North America, and Europe. It manufactures passenger cars, trucks, buses, forklifts, light commercial vehicles, power trains and parts, and also offers sales financing activities.
Nissan currently carries a Zacks Rank #1 (Strong Buy). Other companies in the foreign automobile sector that are worth considering are Volkswagen AG (VLKAY) and Fuji Heavy Industries Ltd. (FUJHY). Fuji and Volkswagen carry a Zacks Rank #1 (Strong Buy).
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