Mexico becoming Nissan's export hub for Americas - CEO

By Editor

Nov 12, 2013 09:17 PM EST

Nissan Motor Co Ltd will build 1 million cars in Mexico by 2016, cementing the country's position as the export hub for the Japanese automaker in the Americas, Chief Executive Carlos Ghosn told Reuters as he inaugurated a $2 billion plant.

Most of the cars from the new plant in Aguascalientes in central Mexico will be sent by rail to destinations throughout North and South America.A staff of 3,000 in the light, airy plant filled with rows of shiny yellow robots will produce one car every 38 seconds, in partnership with Nissan's other Aguascalientes plant.

"We like Mexico because it allows us to be competitive," Ghosn said in an interview at the plant on Tuesday. "It's not only about cost, it's also about quality and it's about responsiveness - capacity to respond to variation of the market very quickly.

"Mexico is becoming the export hub for the Americas - not only North America but also South America."

The new factory, which was built in a record 19 months, is critical to helping Nissan meet growing demand for compact cars such as the Nissan Sentra throughout the Americas. Nissan will build 175,000 Sentras at the new plant, which can be expanded.

"It's capable of doing four different cars on four different platforms," Ghosn said of the plant, which will assemble cars with engines built at Nissan's first Aguascalientes plant 5 miles (8 km) down the road.Last year, Nissan built around 5 million cars and trucks, with 683,520 vehicles made in Mexico. Nissan currently builds 1 million cars and trucks at its factories in the United States.

The new plant is Nissan's third in Mexico. Nissan, 43.4 percent-owned by Renault SA, of which Ghosn is also CEO, is Mexico's largest producer and commands about one-quarter of all car sales in the country.

Nissan plans to locally sell about 300,000 of the 1 million cars it will ultimately make in Mexico.

Low wages, a strong supply base and a global web of free-trade agreements have spurred automakers to build new plants in Mexico. This shift may threaten jobs in the United States and Canada, where even non-union factories are influenced by contracts forged with unions including the United Auto Workers.

The UAW was not immediately available for comment.Nissan is also making some "marginal investments" to its plant in Cuernavaca, south of Mexico City, to improve existing production there, Ghosn said.

Germany's Daimler AG DAIGn.DE and Nissan are expected to build small Infiniti and Mercedes-Benz luxury cars at the new factory in the future, but Ghosn said no decision has been made on plans to expand capacity. 

Daimler is discussing "different strategies" for building the next-generation compacts in Mexico with partner Renault-Nissan, a top Daimler executive said late last month. 

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