Early move into China for Nissan with LEAF-based EV
Dongfeng Motor Comapany, Ltd. (DFL) is a subsidiary of one of China’s largest automobile producers, Dongfeng Group, and was established as a joint venture between Nissan and Dongfeng Group in 2003. Dongfeng Group has partnered with such diverse auto makers as Nissan, Kia, Peugeot-Citroën and even Cummins, the truck engine guys. We don’t even pretend to know the ins-and-outs of the Chinese vehicle market, but it seems that any foreigner must partner with a domestic manufacturer if they want to do business in China.
Dongfeng and Nissan have jointly announced their intention to build the VENUCIA EV at an all new manufacturing plant being built in Dalian, China. This plant is scheduled to produce Nissan-branded vehicles with annual capacity of 150,000 units by 2014 with ultimate capacity of 300,000 units. This will be Nissan’s fourth plant in China.
According to Hiroto Saikawa, Executive Vice President of Nissan Motor ”China is our largest market today and will continue to be one of Nissan’s most important engines of growth.” Not sure if we read that right, we looked up the most recent global sales numbers that we could find for Nissan. In April 2012, retail sales in China totaled 112,365 units. The next highest sales number after that was the U.S. market with 71,329 retail sales, so indeed China is Nissan’s largest market and by a significant amount. Of those Chinese sales 111,621 vehicles were produced in China. The next largest global production number in April was 85,734 in Japan, so Chinese production even exceeds the Japanese home-market production by a sizable amount. By comparison 54,480 units were built in the U.S. in April or just over half the number built in China. With global sales of 364,173 units that month, the Chinese market accounted for almost a third of Nissan’s sales globally in April.
What we gather from all of this is that production of the LEAF in China – excuse us… the VENUCIA EV – will be an important factor for LEAF production in the rest of the world. DFL has signed a contract to deliver 1,000 VENUCIA EVs to the local government by 2014. As EV production ramps up in Smyrna, Sunderland, U.K. and China, manufacturing efficiencies learned at all of these facilities will combine to lower the cost of battery production over time. Most importantly, local production will lower costs for all markets hopefully providing a lower cost of entry for future LEAF owners.