Nissan’s ambition will benefit TN

Nissan’s ambitious plans to build its U.S. market share and push ahead of Japanese rival Honda will bring more jobs for Tennessee and Mississippi.

That means more than 7,000 people will be employed at the company’s Smyrna plant by year’s end, more than double the total that General Motors will have at its Spring Hill plant when the current expansion under way there is complete. And in Canton, Miss., the total will rise to 4,500 workers, up from 3,900 now.

As Nissan makes a run not only at Honda’s total U.S. sales, but also at the nation’s top-selling car, the Toyota Camry, Nissan’s North American plants have gone into rapid-expansion mode.

At Smyrna, which even before new hiring began earlier this year was the largest U.S. auto plant, an additional 1,200 will be hired by the end of the year to accommodate production of the Nissan Leaf electric car and the Rogue compact crossover, both of which are now made exclusively in Japan.

That’s not counting an additional 200 jobs that will be created this fall at Smyrna’s adjacent lithium-ion battery plant, which will make battery packs for the Leaf. Several hundred jobs had already been added at Smyrna earlier this year to accommodate the all-new Infiniti JX large crossover, whose production began in February.

And in Canton, where Nissan has its second U.S. assembly plant, the increase of 600 jobs by year’s end will accommodate production of the redesigned 2013 Sentra compact sedan, which is being added to the plant this fall. The Sentra now is made only in Mexico, although it was assembled in Smyrna for nearly two decades, until it went to Mexico in 2000.

Already, Nissan has added about 400 workers at Canton to assemble the Frontier compact pickup and Xterra compact sport utility vehicle, which are moving later this summer from the Smyrna plant.

Relocating the Frontier and Xterra to Canton frees up needed space for new vehicles in Smyrna, and it also helps build up the underutilized truck line in Canton, said Bill Krueger, Nissan’s vice chairman for the Americas. The line also assembles the Titan full-size pickup and the Armada large SUV.

“We will run all four of those vehicles on the same line” in Canton, Krueger said. “Trucks will be going from one shift to two this fall, but we will still have an open shift available.”

Smyrna may be getting the better part of the deal. The Rogue is Nissan’s second-best-selling vehicle, behind the Altima, which is built in Smyrna and Canton. June sales of the Rogue totaled 10,999, compared with 5,651 for the Frontier and 1,580 for the Xterra.

Smyrna’s expansion, which includes adding a third daily shift, will raise production capability on the car line to 60 an hour, Krueger said. While Canton will be running two different vehicles on its car line beginning late this year, Smyrna will have four: the Altima, the Leaf, the Rogue and the premium Maxima sedan.

The truck assembly line at Smyrna already runs on three shifts, and that won’t be affected by the move of the Frontier and Xterra to Canton, he said.

That’s the Smyrna line that also now makes the Infiniti JX and the Nissan Pathfinder midsize SUVs. That line will begin assembling the redesigned 2013 Pathfinder later this year, a lighter, more fuel-efficient seven-passenger crossover that Nissan believes will significantly beat the sales of the current truck-based model.

On the car side, Canton is already almost at capacity with the redesigned 2013 Altima, running three shifts five days a week, Krueger said. A $25 million expansion of Canton’s car assembly line already under way will make more room for the Sentra and also “clears some bottleneck areas” that will allow the line to produce 40 cars an hour, up from about 32.

Vital capacity

All of this adds up to more capacity to build vehicles for North America, which is vital to Nissan’s goal to increase its U.S. sales and overtake competitors, industry experts said.

“Nissan does set high goals, but they seem to hit those goals with regularity,” said Jeremy Anwyl, chief executive of the auto-research site Edmunds.com. “You have to give them credit.”

Capping six years of increases in a row, Nissan’s U.S. market share reached 8.2 percent in calendar year 2011, compared with 9.7 percent for Honda and 13.8 percent for Toyota. That put the company at No. 6 overall in the U.S. market. General Motors (19.2 percent) is in the top spot. Others above Nissan are Ford (16.5 percent) and Chrysler (10.5 percent).

Already this year, Nissan’s U.S. sales are up 14.4 percent overall; in June, sales spiked 28.2 percent over the same month in 2011.

Add a bunch of impressive new products into the mix, and the goal of beating Honda doesn’t seem out of reach, said George Peterson, president of the market-research group AutoPacific.

But to do that, Nissan needs the additional production capacity, he said.

“If they can keep their plants running at over 80 percent of capacity, market share is the offshoot of that,” Peterson said. “To beat the Camry, if they have the capacity in place, they may have a chance.”

Localization saves

The expansion of all of Nissan’s North American facilities — including a new, $2 billion plant to be built in Aguascalientes, Mexico, that will bring 3,000 jobs — is part of the company’s goal to make 85 percent of the vehicles it sells in North America at its plants in North America by 2015. There are two other plants operating in Mexico, as well.

Building the vehicles near where they are sold saves the company money, particularly now that the Japanese yen is very strong against the weak U.S. dollar, Krueger said.

“The localization of parts and assembly of the products in the markets where we sell them really gives us the ability to purchase, fabricate and sell within the same currency,” he said. “We don’t see huge swings based on exchange rates, tariffs or import duties.”

Nissan now has the capacity to build more than 550,000 vehicles a year at the Smyrna plant and more than 400,000 at Canton. Total U.S. sales reached 1,042,534 in 2011, the first time they topped 1 million since before the recession.

The company began production of the redesigned Altima sedan at Smyrna in May, and in Canton in late June. The top-selling Nissan vehicle, the Altima, jumped past the former No. 2 Honda Accord to become the second-best-selling car in the United States in 2011, just behind the Camry, which has held the top spot for all but one of the past 15 years.

For the year through June, Altima sales are in third place but still ahead of the Accord. In the top spot is the Camry, with 213,903, followed by the smaller Honda Civic, at 162,582; the Altima, 157,101; and the Accord, 155,178.

The redesigned Altima didn’t go on sale until late June, and it’s the vehicle that analysts believe has the chance to knock the Camry from the top spot. But a redesigned Accord is coming later this year, as well.

“The new Accord is still an unknown quantity,” Peterson said. “When that part of the puzzle falls in place, it will be a real battlefield in the midsize-sedan segment over the next six months. Rumor has it that the new Accord is good, but not fantastic like the Altima.”

Written by
G. Chambers Williams III
The Tennessean

Comments are closed