Nissan is to invest US$1.5bn in a new Brazilian plant to expand its market coverage in the booming Latin American market with the launch of new compact models.
Renault-Nissan chairman and chief executive Carlos Ghosn said the alliance plans to introduce a number of models to the Brazilian market in the next few years in a bid to double its market share to 13% by 2016.
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He told Reuters the alliance plans to build the new Nissan factory and expand an existing Renault plant in Brazil as part of a sales offensive in the BRIC countries of Brazil, Russia, India and China.
Ghosn said Brazil was the only BRIC country where the alliance had not announced an offensive strategy.
“Now is the right time to announce it for Brazil. For me, on top of the objective reasons, it’s a very emotional moment because I like Brazil, I was born in this country.”
The new Nissan plant in Resende, about 56 miles (90km) from Rio, will produce Nissan-brand vehicles and the group will expand its main factory in Sao Jose dos Pinhais where it has made Renault-brand vehicles since 1998.
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By GlobalDataSources have told Reuters that the plant could produce about 220,000 cars a year.
Ghosn’s aim is to raise Nissan’s share of the fast-growing Brazil market market to 5% by 2016 from around 1.5% now. He wants Renault’s share to rise to 8% from just over 5%.
The big four producers in Brazil are Fiat, Volkswagen, General Motors and Ford.
Nissan sold nearly 37,000 cars and light trucks in Brazil through August this year, compared with nearly 20,000 in the first eight months of 2010, making it the country’s No. 12 carmaker by sales, according to dealer association Fenabrave.
Ghosn said: “Renault’s potential is way above 5%. We’re going to pursue this potential, we’re going to bring cars, we’re going to be contributing to the development of the Brazilian market.”
Nissan last month launched its March (Micra) compact model in Brazil and next month plans to introduce the Versa compact, both cornerstones of its strategy in the BRIC countries. The launch of those two models is expected to boost Nissan’s coverage of car segments in Brazil to 83% from the current 23%.
Despite the ambitious target of selling 500,000 electric cars globally by 2015, Ghosn said there were no immediate plans for Nissan to produce those models in Brazil. He said he was pessimistic about the short-term prospects for electric cars in the country, partly because of the high use of biofuels.
