Nissan Motor Co. (NSANY) declared that its Infiniti brand will commence production of cars in China from 2014. The company formed a joint venture with Dongfeng Motor in China with the sole purpose of launching production in the world’s largest auto market.
Two of Nissan’s Infiniti models will be produced in the factories run by Nissan and its Chinese partner. With this, Infiniti brand, which was introduced in China in 2007, will launch its first-ever production outside Japan. The brand plans to introduce the M35hL sedan, which has been designed for Chinese businessmen and government executives, featuring an extended back seat and gas-electric hybrid engine.
Apart from the Infiniti models, Nissan plans to launch D50, a car that will be sold under the brand name Venucia and to be manufactured jointly by Nissan and Dongfeng. The launching of new electric cars in China is also on the company’s agenda. The decision gained credence with the Government’s announcement of a launch of 5 million electric cars by 2012. The company aims to sell 500,000 vehicles by 2016.
China witnessed a downfall in automobile sales to 2.5% in 2011 from 35% in 2010. However, sales expected to grow 5% in 2012, which is stronger than that of the United States and Europe. Automakers, owning very few businesses in China, ardently look forward to expand its market in China in the coming years. The expansion will also be able to meet Chinese consumers’ preference for foreign car brands.
Apart from Nissan, Ford Motor Co. (F) recently announced the construction of an assembly plant in the eastern city of Hangzhou for $760 million. The plant will double the company’s production capacity in China to 1.2 million automobiles per year.
Nissan Motor, founded in 1933 and headquartered in Yokohama-shi, Japan, together with its subsidiaries, engages in the manufacture and sale of automotive products, industrial machinery, and marine equipment, primarily in Japan, North America, and Europe. The company offers passenger cars, trucks, buses, forklifts, light commercial vehicles, power trains, and parts, as well as sales financing activities. Currently, the company retains a Zacks #1 Rank, which implies a Strong Buy rating for the short-term.
To read this article on Zacks.com click here.
Zacks Investment Research