Nissan to shift subcompact car production to Thailand in 2010

Apart from the incentives, producing the March in the Kingdom will benefit Nissan in terms of lower production costs than in Japan. Cheaper Thai-made parts can be used, while labour costs here are also lower.

Roger Immel, vice president for sales at Siam Nissan Automobiles, said yesterday that the March would be produced locally under Nissan's eco-car programme {Before Japanese production is also transferred?}.

Six auto-makers - Toyota, Honda, Tata, Mitsubishi, Suzuki and Nissan - have been granted Board of Investment tax privileges for the manufacture of eco-cars. While all have said they are committed to their plans, only Suzuki has bought land along the Eastern Seaboard for its eco-car plant.

Siam Nissan Automobiles earlier announced it would spend Bt5.55 billion to manufacture 120,000 eco-cars, including for the export market.

Due to the fluctuation in fuel prices, small and fuel-efficient models are expected to gain popularity in the global market.

The Japanese carmaker is expected to incur an operating loss for the 2008-09 fiscal year ending March 31, due to the global slowdown in auto sales and a stronger yen.

The production shift emerged as Thailand offered tax breaks for the production of small, fuel-efficient cars under the eco-car project.

At present, Nissan produces its March subcompact in Japan's central province of Kanagawa for domestic consumers, selling about 47,000 units a year.

The newspaper also said the redesigned March would use a chassis developed with French partner Renault. Production costs for the car would be cut by about 30 per cent by procuring more parts locally (Thailand?) - about 90 per cent - in addition to using a common chassis.

The new restructuring plan involves shifting production to Thailand and then importing all of the units back for the Japanese domestic market in time for a full remodelling of the March planned for next year.

Nissan also plans to shift production of its Micra from the United Kingdom to India next year.