NASHVILLE (March 4, 2009) — Nissan North America today launched a $118 million expansion of its Mississippi plant, even as the U.S. economy staggers.
Nissan will boost the size of its underutilized Canton, Miss., plant to produce light-commercial vehicles in mid-2010.
The project will require a new dedicated assembly line, a larger paint operation and a bigger assembly area — capacity investments that are the farthest things from the minds of most U.S. auto makers at the moment.
"This makes sense to us," says Dan Bednarzyk, the plant's vice president of manufacturing."As bad as things are right now, we're optimistic that by the time we come on line in 2010, we'll be in the right position for the market."
Nissan's commercial truck business represents a diverse global line that includes small delivery vehicles and vans, furniture hauling trucks and emergency vehicles. Yesterday in Geneva, Nissan unveiled a production version of its small NV200 van, which is slightly larger than an American minivan.
The global business grew 8 percent in 2008, Bednarzyk says.
But the United States is the only major market where Nissan does not sell commercial vehicles. Nissan CEO Carlos Ghosn has championed the entry into the United States as a key to growth here. It is an area largely immune to Ghosn's new cost-cutting campaign at Nissan, which faces a $2.9 billion loss for the year ending March 31.
Nissan selected its Mississippi plant a year ago for its entry into the U.S. light-commercial market, saying that Canton will build three all new U.S.-designed models. The company is soliciting Nissan retailers to sign on as light-commercial dealers.
First vehicle only
But today's announcement left some issues unresolved.
The expansion project will set the stage for the first of the three new vehicles. Bednarzyk declined to say what the other two vehicles will be and clarified that the project's new assembly line is intended only for the first of the three vehicles.
Another question hangs over Nissan's full-sized Titan pickup, also now built in Canton.
The new project partly represents a conversion of some of Canton's capacity space. For the past six years, the plant was designed to build the Nissan Altima sedan, Quest minivan, Titan pickup, Armada SUV and Infiniti QX56 SUV. Last year, Nissan said it will source the underselling Quest to a Japanese factory next year and will outsource production of the Titan to Chrysler L.L.C., which will assemble the pickup at a Chrysler plant in Mexico.
But Nissan and Chrysler recently said they were re-evaluating that Titan plan, with a suggestion that Nissan might have to produce its next-generation Titan itself.
Bednarzyk clarified that the conversion of Canton's factory space to light-commercial trucks doesn't interfere with Titan production. He said it would be possible for Canton to continue producing the Titan, if necessary, even while juggling new vehicles.