Nissan to Boost China Output – Analyst Blog

Nissan Motor (NSANY) has revealed it plan to open a joint venture assembling facility in South China with its partner Dongfeng Motor Corp. This will be the second facility of the cars and light commercial vehicles joint venture in the country. It already operates a plant in Zhengzhou, capital of Henan Province.

By opening the new facility, Nissan intends to ease capacity constraints due to the rising demand at its existing plants in Huadu and Xiangfan. The two plants have been running with increased overtime and weekend operation. The new facility will raise total production capacity of the automaker in China by 160%.

The Huadu and Xiangfan plants build the Dualis and X-Trail sport-utility vehicles. Nissan plans to shift production of these two models to the new plant.

In the first half of the year, Nissan’s production in China increased 54.8% to 487,846 units. Meanwhile sales rose 51.4% to 503,077 units during the period.

In the first quarter of its fiscal year 2010, ending March 31, 2011, Nissan showed a profit of ¥106.6 billion ($1.16 billion) in contrast to a loss of ¥16.5 billion ($180 million) in the same quarter of previous year.

Revenues in the quarter rose 35% to ¥2.1 trillion ($22.28 billion). Operating profit totaled ¥167.9 billion ($1.82 billion). Nissan forecasted to earn ¥150 billion ($1.67 billion) in the full fiscal year.

During fiscal 2010, Nissan plans to introduce 10 models globally. The automaker has already launched its compact sports crossover, Juke, in June. The remaining models, including the 100% electric and zero-emission compact 5-door hatchback car Leaf, will be introduced in the rest of 2010.