Nissan CEO Says He Needs More North America Capacity

Nissan Motor Co Chief Executive Carlos Ghosn said on Thursday the automaker needs more capacity in North America to fuel its growth, reported Reuters.

Demand for Nissan Rogue sport utility vehicles can be supplied in the short term from plants in Korea and Japan, but longer term “we obviously need more capacity in North America,” Ghosn told reporters at the New York auto show.

Nissan is driving to boost its market share in the United States to a “sustainable 10 percent” by 2017, he said. Nissan, including its Infiniti luxury brand, had a 9.3 percent share of the U.S. market as of the end of March and Ghosn said it aims to keep growing from there.

He did not lay out a timetable for further expansion of North American production, or say whether Nissan would build new plants or increase production within the factories it has.

Ghosn’s signal of further investment in North America comes at a time when several rival automakers have also spoken of plans to add factories or assembly capacity in Mexico, the United States or Canada.

Volvo Cars, the Swedish luxury brand owned by China’s Zhejiang Geely Holdings, said earlier this week it planned to invest $500 million in a U.S. factory and Korea’s Hyundai Motor Co is considering an expansion of North American production capacity. German automakers Volkswagen AG, Daimler AG and BMW AG have also expanded their U.S. or Mexican production in recent years.

The United States and China are the two largest and most profitable auto markets in the world. As automakers have encountered obstacles in emerging markets such as Russia, India and Southeast Asia, they are turning again toward the United States for growth.

On a separate matter, Ghosn said reworking the capital structure of the Renault-Nissan alliance will “take a back seat” to hitting the targets for operating performance he has laid out for the companies. Nissan, for example, is aiming for 8 percent operating profit margins and 8 percent global market share by the end of its 2016 fiscal year in early 2017.

Some shareholders have pressed for Renault to free up capital now held in its 43.4 percent holding in Nissan. The French and Japanese automakers forged their alliance in 1999, when Nissan was near collapse. Now, Nissan’s market capitalization of about $46 billion is larger than Renault’s, which stands at about $27 billion.