As Yen continues to strengthen itself against the U.S. dollar, Nissan Motor Company has decided to turn the prevailing trend to its advantage. The third largest vehicle exporter from India is expected to count on the new highs attained by Yen, for the purpose of intensifying operations at its Indian facilities considerably. The car maker aims to raise the bars for its Indian plants in order to make the country the third biggest hub after Mexico and Thailand.
On the face of it, Nissan seems to fish in troubled waters by making best use of the uncertainties persisting in foreign currency markets. The ambiguity has been caused due to the unprecedented show put up by the Japanese Yen against the dollar over the last few weeks. Moreover, the incessant appreciation has given rise to situations that fully favour the exports from Nissan’s Japan facilities, especially in terms of competition and price. It must be noted that Yen appreciated 2.5 per cent compared to U.S. dollar in the past two weeks.
This would eventually help in proliferating the Nissan capacities in India that would then be eligible to meet the global market demand. “India will be more important as an export hub for Nissan’s global operations in future. Due to Yen appreciation, it doesn’t make business sense to export more out of Japan. Hence, we plan to expand capacity in both India and Thailand for global operations,” said Kiminobu Tokuyama, Managing Director and Chief Executive Officer, Nissan India.
The phenomenon has surfaced as a great boost for two other Japanese automobile makers viz. Honda and Toyota that recently tipped-off to curtail their exports out of Japan.
Over the time, Nissan has allowed India to become an export hub for its small cars, standing at the third biggest car exporter position closely following South Korea’s Hyundai Motor and Maruti Suzuki. Nissan has disseminated around 1.25 lac cars solely for model Micra within the past 15 months, since it entered the export business, catering the needs of over 100 countries.
Tokuyama said, “We hope to fully utilise our plant capacity of 400,000 units before our initial expectations (2015-16). Further, we will soon study whether we can expand capacity in same facility or look for new plants. We will start exports of recently launched Sunny sedan in 2012.”
As a matter of fact, Honda and Toyota are still preparing themselves to commence the process of exports from the country and plan to start exports by next year.
Thus, Nissan Motor Company is taking a long stride towards giving its position an all new high and forcing rivals to contemplate over their current plans.
