Nissan Motor Co. (NSANY) has revealed plans to manufacture Sentra sedan in its Canton, Mississippi plant from December this year. The company will be hiring around 1,000 workers for this purpose, leading to a total strength of 5,000 workers in the plant, and boost the capacity at the plant to 450,000 vehicles.
The Canton plant located near the Mississippi state capital of Jackson also produces the Altima sedan – the highest selling vehicle of Nissan, Frontier and Titan pickups, Xterra and Armada sports utility vehicles (SUVs) and the NV van. The company also plans to produce Frontier and Xterra in the plant later in the year.
At present, the Canton plant has assembly lines dedicated to trucks, Altima sedan and the NV van. The Sentra sedan will be assembled in the Altima line.
Nissan also produces Sentra in its Aguascalientes, Mexico plant. Production in this facility will be continued based on the steady market demand.
Nissan has already invested $2 billion in the Canton plant where the state's contribution was $378 million. The company plans to invest about $20 million further for hiring the workers while the Governor of Mississippi assured a contribution of $7.5 million for training and infrastructure purposes for the new hires.
Nissan will expand further to meet the rising demand. About 69% of the vehicles sold by the company has been produced in the U.S. The company plans to increase the ratio to 85% by 2015, with an aim to capture about 10% of market share in the U.S.
Nissan Motor is the sixth largest automaker 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 offers passenger cars, trucks, buses, forklifts, light commercial vehicles, power trains and parts, as well as sales financing activities. It competes with Honda Motor Co. (HMC) and Toyota Motor Corporation (TM).
Currently, Nissan Motor retains a Zacks #2 Rank, which translates into a short-term (1 to 3 months) “Buy” rating. We have a long-term (more than 6 months) “Outperform” recommendation on the stock.
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