From the year 2014, the USD 315 million plant of Nissan motor company in China will start manufacturing its Infiniti brand of luxury cars. This move from the second largest car manufacturer of Japan is an attempt to challenge the German rivals in the world's largest car market. According to industry experts, the localisation of the production in China will provide the company with a better stance against Audi AG, Mercedes Benz and BMW AG, who have already localised their production. Nissan has been selling its Infiniti models in the country since 2007 through CBU route.
Jenny Gu, a manager, LMC automotive which is an industry consultancy, said, "It's a necessary step if Infiniti wants a bigger share of the Chinese market." She further, said, "Local production would provide the volume it needs to catch up with the German brands and help to offset a rising yen that makes cars imported from Japan more expensive.”
Nissan in a statement said, two of its Infiniti models will be manufactured at a factory it jointly operates with Dongfeng Motor Group that produces Murano and Teana models. The company further stated that the manufacturing unit located in Xiangyang city in central China will have an initial capacity to produce 1,30,000 units, which will eventually increase to 2,50,000.
In the last fiscal year that ended in March, Nissan reported sales volume of 19,000 Infiniti models. This was a small figure compared to Audi's 3,00,000 sales for the year 2011. A sales output of 5,00,000 cars worldwide by 2016 is on the agenda of Nissan's mid-term growth plan and according to the company, majority of this growth will come from China.
President, Dongfeng Motor Co, Nissan's joint venture with Dongfeng, Kimiyasu Nakamura, said, "The localization of Infiniti at our Xiangyang plant is a significant milestone for us.” He also said, "It proves that we are fully capable of producing luxury vehicles of the highest quality standards here in China, at the same level of quality as the Tochigi plant, its mother plant, in Japan." Earlier in May, Nissan's Infiniti brand shifted its global headquarters to Hong Kong from Yokohama, Japan.
As per a research firm, LMC Automotive, Toyota Motor Corporation lost its position to Nissan, which went on to become the largest Japanese light-vehicle brand in China for the first time in 2011. In luxury car market of the country, Nissan can move ahead of Toyota and Honda Motor Company with the aid of its Infiniti factory. According to Dieter Zetsche, Chief Executive Officer (CEO), Daimler AG, this segment, after years of excessive growth, will go on to grow by 15-20 per cent in 2012.
In order to capture bigger share of the market, other luxury automotive companies like General Motors and Honda are following the foot steps of Nissan. During the last week of April, a large coupé like sedan was announced by the PSA Peugeot Citroen, which is a successor to the Citroen DS luxury sub-brand. Peugeot hopes to achieve a yearly sales target of 2,00,000 vehicles in next four years with this model, which is expected to be launched on 28th June.
Nissan is planning to localise the manufacturing process of its Infiniti brand in US and Europe in an attempt to hedge Forex risks and to triple its global sales by 2016.
