Nissan to Make India Export Hub, After Mexico, Thailand.

Japanese currency, Yen’s continued appreciation against the US greenback has turned out to be a boon for Nissan Motor, the third largest automobile exporter from India.

The Japanese automaker will leverage the Yen appreciation to turn its Indian facilities as third biggest export hub after Mexico and Thailand. Indian exports would eat into Japanese pie of exports hitherto made by Nissan.

Nissan has apparently decided to take advantage of volatility in foreign currency markets after Japanese Yen hit historic highs against the US dollar in the past few weeks. And, this appreciation continues unabated making exports from Nissan’s Japan facilities untenable and non-competitive in terms of prices. Yen appreciated 2.5 per cent against the US dollar in the past fortnight.

This may also lead to expansion of Nissan capacities in India to cater to the global market demand. “India will be more important as an export hub for Nissan’s global operations in future. Due to Yen appreciation, it doesn’t make business sense to export more out of Japan. Hence, we plan to expand capacity in both India and Thailand for global operations,” said Kiminobu Tokuyama, managing director and chief executive officer, Nissan India.

The phenomenon is not limited to just Nissan Motor. Two other Japanese automobile makers, Honda and Toyota have also recently hinted at reducing exports out of Japan.

Nissan has made India an export hub for its compact cars, becoming the third biggest car exporter from India trailing South Korea’s Hyundai Motor and Maruti Suzuki. Nissan has exported 1.25 lakh cars of its single model Micra in 15 months, since it started catering to demand in over 100 countries.

“We will start exports of recently launched Sunny sedan in 2012,” Tokuyama said. He didn’t give an overseas sales forecast, but said the company will soon start operations on second assembly line at its Rs 4,500 crore plant in Chennai in partnership with Renault. The company is currently operating at less than 50 per cent of its present capacity of 200,000 units at Chennai. The second assembly line will increase the plant’s annual output to the installed level of 400,000 cars annually.

“We hope to fully utilise our plant capacity of 400,000 units before our initial expectations (2015-16). Further, we will soon study whether we can expand capacity in same facility or look for new plants,” Tokuyama said. The ambitious expansion plans in India are part of a larger ‘mid-term global growth strategy’ formulated by company’s chief executive Carlos Ghosn.

Titled as ‘Power-88’, the strategy envisages eight per cent global market share and eight per cent operating profits for the carmaker in five years from now.

Other Japanese carmakers such as Honda and Toyota are yet to start car exports from the country. Both of them plan to start exports next year. While Toyota will start export of Etios to South Africa by March 2012, Honda plans to export Brio to neighbouring countries sometime next year.

Maruti Suzuki that exports cars to 100 countries including models such as the A-Star and Estilo, is struggling to boost exports in its main export market, Europe. Between April and November 2011, Hyundai exported 166,843 cars (seven per cent growth), Maruti Suzuki 73,776 cars (24 per cent decline) and Nissan exported 67,802 cars (growth of 934 per cent) compared with year-ago period, as per data available with Siam.

Meanwhile, Nissan said it aims to sell 40,000 cars in India this financial year, compared with 13,000 units a year ago, buoyed by diesel versions of Micra and Sunny.

Source : mydigitalfc.com