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Nissan says can meet U.S. sales goal with capacity in South Korea, Japan

Published 02/26/2015, 10:06 PM
© Reuters. A car is reflected in the bonnet of a Nissan car in the showroom at Nissan's global headquarters in Yokohama south of Tokyo
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By Chang-Ran Kim

YOKOHAMA, Japan (Reuters) - Nissan Motor Co (T:7201) will be able to meet its goal of taking 10 percent of the U.S. market in two years without any major new investments and by making use of capacity available at factories in Japan and South Korea, a top executive said on Friday.

With sales in the United States growing at nearly twice the pace of the overall market last year, Japan's No.2 automaker has been expanding capacity at its North American plants but needs more to meet demand.

"The key word is flexibility," Jose Munoz, executive vice president at Nissan and chairman of its North American arm, told reporters at Nissan's headquarters in Yokohama.

"I can't (give) you concrete numbers now but we have already started to work on how we can capitalize on the available capacity in Japan for North America."

Earlier this month, Nissan announced plans to tap alliance partner Renault SA's (PA:RENA) joint venture plant in South Korea to export more Rogue crossovers to the United States.

With recent and upcoming model launches in the United States such as the Murano sport-utility vehicle, Maxima sedan and Titan pickup truck, Munoz said Nissan has "never been as confident as we are today" over its prospects in the United States, its biggest market.

The Tennessee-based Spaniard also said there was no reason for Nissan to lag rival Honda Motor Co (T:7267) in the United States given its broader product range that includes a full-sized pickup truck and a bigger manufacturing footprint in North America.

Munoz noted that Nissan is closing the gap with Honda also in key product segments where the latter has traditionally dominated with Toyota Motor Corp (T:7203), thanks to brisk sales of the Altima and Sentra sedans.

"I'm confident we will overtake them," he said, declining to estimate a time frame.

Nissan took 8.4 percent of the U.S. market in 2014, inching closer to its 10 percent goal for the business year to March 2017.

But brisk sales have been driven partly by generous discounts and low-profit deliveries to fleet customers - both of which Munoz said Nissan was successfully beginning to rein in.

© Reuters. A car is reflected in the bonnet of a Nissan car in the showroom at Nissan's global headquarters in Yokohama south of Tokyo

Shares in Nissan have risen nearly 20 percent since the company announced third-quarter results earlier this month, partly on hopes for improved profitability in North America. The stock was down 1 percent midday on Friday, after hitting a more than seven-year high a day earlier.

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