Renault and Nissan, the French-Japanese automotive partnership, recently confirmed that it plans to set-up a new automobile plant and expand an existing plant in Brazil. The move is believed to be directed towards creating an effective market share in the world's fourth largest car market.
Carlos Ghosn, Chairman and Chief Executive of Renault-Nissan informed the reporters in Brasilia, regarding the latest plan. He said that the new plant in Resende, about 90 km from Rio de Janeiro, will give rise to Nissan-brand vehicles, and the team of two will increase the size of its prime factory in Sao Jose dos Pinhais. The main plant, which has carried out the production of Renault-brand vehicles since 1998, at present, assembles Nissan pickups and trucks.
"We expect Brazil to become the No. 2 market for Renault after France. For Nissan we expect this to help us increase our presence in one of the world's most important markets," Ghosn was quoted as saying.
Brazil's automobile market underwent huge growth in recent times, positioning itself at the fourth place currently. As a matter of fact, the constantly flourishing car market of Brazil is closely following China, the United States and Japan, in the race to become the most successful car market in the world. Ghosn said, he is determined that Brazil auto market would boost the output of light vehicles to more than 4 million a year, from 3 million units produced currently, within five years. The target implies that Brazil would probably be overtaking Japan for the third spot, if things go as planned.
For Nissan, which imports most of the vehicles it sells in Brazil, mostly from Mexico, Ghosn said that he expects Brazilian-built Nissans will comprise 65 per cent of locally built content. At present, Nissan manufactures the Frontier pickup and Livina cargo van at the Renault facility in Sao Jose dos Pinhais.
After coming out with cars in Brazil that would carry a minimum 65 percent of local content, Nissan would exempt itself from the 30 percentage-point increase in Brazil's Industrialized Products Tax (IPT). The tax has been imposed on imported cars, in September, to curb the number of auto imports, primarily from Asia.
Ghosn also said that electric vehicles are a part of Nissan's plans in Brazil.
