Nissan has officially opened its newest assembly plant, in Aguascalientes, Mexico. The company invested $2 billion on the factory, one of the most expensive ever to be built in Mexico. Production of Sentras actually began last week, but Nissan CEO Carlos Ghosn and Mexico President Peña Nieto declared the plant open in a ceremony on Tuesday. It has an annual capacity of 175,000 units, part of Nissan’s plans to be making 1 million vehicles a year in Mexico by 2016. It’s the second Nissan assembly facility in Aguascalientes and it will be an export hub for the Americas.
During an interview at the plant opening, Ghosn said, “We like Mexico because it allows us to be competitive. 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.”
Mexican made Sentras are an important part of Nissan’s plan to increase U.S. market share to 10% by 2017 from its current 8% share. Supply of B and C segment cars has been tight for Nissan this year, with the company delaying advertising the redesigned Sentra because it hasn’t been able to get enough of them to dealers.
“Our dealers haven’t been able to get all the cars they need,” said Jose Munoz, who will be taking charge of Nissan’s American operations in January. “This is going to change things for us.”
Nissan has sold 106,680 Sentras so far in 2013, up 17% from 2012, but that’s less than a half of the sales volume of cars like the Toyota Corolla and Honda Civic, which typically sell about 300,000 cars a year.
Until the new plant opened, Nissan has been supplying Versas and Sentras for the U.S. market from its other factory in Aguascalientes, which also builds cars for the Brazilian market.
As the new plant comes on line producing Sentras, it can increase Versa production at the other local plant. Also, Nissan is opening a new factory in Brazil in 2014, which should free up more Aguascalientes production for the U.S. The company also started building Sentra at its Canton, Mississippi assembly plant, which has been operating far under capacity. That could add an additional 50,000 Sentras a year.
Analysts say that with a $2 billion investment, Nissan probably has plans to add other vehicles to the new factory’s production mix. It’s also marked off areas of the property for future expansion. There have been reports that Aguascalientes will be where a proposed small entry level luxury car shared by Nissan’s Infiniti brand and the company’s global technology partner, Daimler.
Ghosn stressed the new assembly plant’s ability to handle multiple models. “It’s capable of doing four different cars on four different platforms, so we have a lot of flexibility.”
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