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Korea to build more Nissan Rogues for U.S. market

Fri, 20 Jul 2012

Nissan is turning to Korean automaker Samsung to take the heat off its North American production needs as it struggles to stay a step ahead of U.S. sales forecasts.

Nissan is expanding its two big U.S. auto plants in Tennessee and Mississippi, adding both floor space and work shifts to build more Altimas, Sentras and Rogues. But it is not enough, the company has concluded.

This week, Nissan said it will invest $160 million to launch Rogue production at an underused Renault Samsung Motors factory in Busan, South Korea. Samsung will produce 80,000 Rogues a year for the United States and other export markets, on top of the 100,000 to 120,000 Rogues that Nissan will begin building at its Smyrna, Tenn., factory starting next year.

Two years ago when Nissan decided to move the Japan-made Rogue to a U.S. plant, annual U.S. sales of the crossover totaled just under 100,000 units. Last year, Rogue sales reached 124,543 units. This year, the company forecasts U.S. sales of at least 150,000, and demand is still increasing. Through June, 71,838 Rogues were sold.

The expanded Tennessee plant originally was expected to have enough available Rogue capacity to supply exports to Canada, Mexico and Brazil.

The company's primary motivation has been to move the Rogue out of Japan, where the high yen is undermining company profits, according to Nissan CEO Carlos Ghosn.

Nissan Americas spokesman David Reuter said that with the added production in Korea, Rogue output will end in Japan.

Nissan Division's U.S. sales totaled 523,344 units through June, up 14 percent from the first six months of 2011. U.S. sales of Infinitis, which are all Japanese imports except for the new JX, totaled 54,377 units in the same period, an increase of 15 percent from the first six months of 2011.

Nissan is pulling its U.S. plants in multiple directions. Last month it said it will add Sentra production in Canton, Miss., in anticipation of a redesigned model next year, and it has also just launched production of the new Infiniti JX crossover at Smyrna, which is proving to be a high-volume product.

Of more pressing concern for Nissan, the company's assembly lines are designed to offer production flexibility among various products. That means that when sales of the just-introduced 2013 Nissan Altima increase, as Nissan is forecasting for the next two years, it must take production capacity away from other models.

Nissan has just begun construction of a $2 billion factory in Aguascalientes, Mexico--its second in the city--that will produce 150,000 B-segment vehicles a year. Nissan has not specified which model the plant will produce.




By Lindsay Chappell- Automotive News