Raising production in Tennessee key part of Nissan global strategy

Friday, September 28th 2001, 12:00 am
By: News On 6

TOKYO (AP) _ Nissan Motor Co.'s decision to raise production at its U.S. plant is a key part of the Japanese automaker's global strategy to streamline operations and cut costs in a turnaround led by French partner Renault SA.

Nissan announced Thursday it will start making the remodeled Maxima sedan, set to roll off assembly lines in January 2003, at its plant in Smyrna, Tennessee, creating 2,000 jobs in the state.

Nissan now produces the Maxima at its Oppama plant near Tokyo. But the factory has grown considerably busier since Nissan closed three plants in Japan under a revival plan announced after Renault took a 36.8 percent stake in 1999.

``Increasing production in a huge market like the United States is a plus,'' Shinko Securities Co. auto analyst Shinji Kitayama said Friday. ``To produce cars where they are sold is the best way.''

Nissan, which had been posting years of losses before Renault's arrival, is also trying to reduce platforms _ the key part on which cars are built _ from a peak of nearly 30 to about 10. To do that, cars that look totally different from the outside will be built on the same platform.

Nissan in investing $1 billion to expand its Smyrna plant and its engine factory in Decherd, Tennessee. Nissan is also building a new truck plant in Mississippi.

The decision to move Maxima production to the United States makes sense because Nissan plans to use the same platform for the next Maxima model as the smaller and cheaper Altima compact already being made in Tennessee.

``This move is part of the global realignment of our manufacturing footprint and will not only open up capacity in our Japanese plants for new products coming next year but allow us to save costs,'' said Nissan spokesman Gerry Spahn.

Producing cars where they are sold protects automakers from the fluctuation of currency exchange rates that could lead to unexpected losses.

Nissan now produces 100,000 Maxima cars a year but expects that to fall by 20 percent to 80,000 following the introduction of the new Altima in the United States a month ago.

In an effort to boost its standing in its home market, Nissan is introducing six new models in Japan next year, including the new March and Cube subcompacts.

Both are now being produced at the Oppama plant. Among its exports, the Infiniti luxury car will continue to be produced in Japan, Nissan said.