Nissan is planning a new JPY30-40bn (US$370-493m) car plant in Dalian, China, its fourth in the country, according to company sources.
The Nikkei Weekly reported Nissan would build the factory through a local joint venture with Dongfeng Motor and will assemble the Murano and X-Trail SUVs at an annual rate of 200,000 units. Production is expected to start in 2014.
This will be the company’s first plant in northeast China which will enable the company to better supply vehicles to major cities around China. Dalian is relatively close to the Kyushu region, home to Nissan’s largest Japanese production base, and will be able to procure parts from the cluster of suppliers there.
With China-based carmakers increasing production, signs are growing that supplies in the country are becoming excessive. But the Dalian location, with its sea port, gives the new plant an export hedge.
Nissan also plans to use the new plant to manufacture electric vehicles, using batteries and other key components exported from Japan.
The Japanese company is looking to establish itself as the third-largest automaker in China after Volkswagen and General Motors . Its annual Chinese output capacity of about 1m units beats Toyota’s 800,000 units and Honda’s 640,000.
In raising this to more than 2m units by 2015, Nissan aims to lift its share of sales to 10% from the current 6%.
In addition to constructing the Dalian plant, Nissan will begin producing its Infiniti luxury vehicles at its Xiangfang plant, in Hubei Province, sometime next year. Xiangfang currently produces the Teana midsize sedan.
In its medium-term business plan through fiscal 2016, Nissan aims to triple worldwide Infiniti sales to 500,000 units. Meeting that target will require it to increase production capacity. Its main Infiniti plant, in Tochigi Prefecture, has capacity of 220,000 units a year.