Nissan Motor will pay 7.64 billion baht ($US195 million) to take control of its Thai operations.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Reuters said Nissan raised its stakes in Siam Motors & Nissan Co, the distribution company, and manufacturing firm Siam Nissan Automobile to 75% each from 25%, taking over management control from the Siam Motors group.
Nissan chief executive Carlos Ghosn reportedly said the move followed a trend among major carmakers to consolidate global operations.
“We no longer see minority shareholdings as the optimum way to run our business. Siam Nissan will now be able to realise the full benefits from Nissan’s global scale and capabilities without any restrictions,” he told Reuters in Bangkok.
A Nissan official reportedly said one third of the takeover price reflected the cost of the additional stakes in the Thai units, and the rest represented a fresh capital injection.
According to Reuters, Nissan said majority control of the Thai operations could help it achieve profitable growth in southeast Asia, as well a medium-term goal of boosting global sales to 3.6 million units by September 2005, up 40% from 2001.
Ghosn reportedly said the takeover was necessary to halt a steady market share decline in the past 20 years in Thailand, where domestic rivals Toyota and Honda Motor control a combined four fifths of the market.
Reuters noted that sales by Siam Nissan, which builds the Frontier pick-up truck and Cefiro and Sunny cars, fell 1.8% to 43,557 units in 2003 in a total market that grew by 30% to 533,000 units, and that Siam Nissan Automobile used only 31% of its 140,000-unit annual assembly capacity last year.
Nissan currently trails Toyota, Isuzu and Honda with an 8.2% share, the report added, far below a peak of 20% seen in the mid-1980s.
“For us, this is not acceptable. Not only has our volume decreased, our customer satisfaction and the overall power of our brand in Thailand have not matched our performance globally,” Ghosn said, according to Reuters.
He reportedly said Nissan planned a new Thai market strategy that will include more car models – almost all Thai sales last year were Sunny sedans and light trucks.
Ghosn also said Nissan’s expanded corporate presence in Thailand raised the prospect for the company to follow other car makers in using the country as an export base, Reuters added.
