Nissan opens factory amid drop in sales

Nissan today celebrates the inauguration of its plant in Resende, South of Rio de Janeiro, in a ceremony with the presence of President Dilma Rousseff and the boss brand world, Brazilian Carlos Ghosn. With local production, the automaker hopes to overcome limitations to growth-caused by restrictions on imports from Mexico-and WINS breath to reach the goal of 5% of the Brazilian market until 2016.
The moment, however, is not of the best. Three years ago, when he decided to invest in the project, the market came in a two-digit growth rate, now, to inaugurate his factory, the company finds himself in front of a backdrop of accommodation of demand, inventory and progress of idleness in the industry.
Asked in January if the automaker had repented of disbursing $ 2.6 billion in the venture, Ghosn sought to demonstrate optimism by saying that the prospects for consumption of cars in Brazil are still positive in the long term.
But, for other executives in the industry, the arrival of this factory does not cease to bring concern, for "play" in an industry heavily stocked an additional production capacity of 200 thousand cars per year. Nissan's line, however, is just the first of a wave of factories that will come into operation on a time interval of less than two years. After that, there will be units of Chery, the JAC Motors, Fiat and Honda, plus four luxury brands that have local production: BMW, Mercedes-Benz, Audi and Jaguar Land Rover.
Therefore, more brands will play, with vehicles assembled in the country, a market that is shrinking in size, which increases the risk of overcapacity, with negative implications on prices, use of installed capacity and profitability margins of manufacturers.
Nissan's sales fall this year more than the industry average. While the market registered a fall of 1.7 percent in the first quarter, the Japanese brand plates issued retreated 21.7% in the same period, for a total of 14.5 million cars and light utility vehicles.
Between January and March, Nissan sold 4 thousand cars less than a year before. This loss of market, in absolute values, only it's no worse than the front trio of industry: Volkswagen, General Motors (GM) and Fiat. The participation of the Japanese market, which had closed in 2013 2.2%, fell to 1.9%. In 2012, his best year, Nissan sold over 100 thousand cars, a performance that allowed him to get close to 3% of total sales in the country.
Since then, however, volumes have fallen significantly, reflecting mainly the establishment of quotas for imports of vehicles from Mexico, where the Nissan brings more than 70% of the cars it sells in Brazil-the rest is produced at the factory shared with partner Renault in Paraná.
In Resende, the automaker will assemble first the March hatchback and Versa Sedan, too. Approximately 1.5 thousand workers already work on site.
The company wants to become the main Asian brand in the Brazilian market. However, reaching 5% of the total sales until 2016-the goal pursued by the company-may be insufficient for this purpose, taking into account that the Korean Hyundai has already reached 6 percent of the market.
In addition to cars, the Nissan will produce engines in the industrial park of Resende, given thus demands nationalization of components collected by the federal Government in the new automotive system. In the line of thrusters, the investments are estimated at $ 140 million, a figure included in the package of r $ 2.6 billion planned for the country.
As Carlos Ghosn announced in January, the production capacity will be 200 thousand engines per year, enough to power all of the potential car Assembly.