Nissans two U.S. plants, including the one in Smyrna, could soon go global and begin making vehicles for export overseas, moving beyond their current role of assembling cars and trucks only for buyers in North America.
The move could lead to significant expansion of the automakers U.S. production facilities, including its other vehicle-assembly plant, in Canton, Miss., and the engine plant in Decherd, Tenn., analysts say. And any significant expansion could also bring an increase in jobs for American workers.
Building cars here for export is a move that Nissans Japanese leaders have said might be necessary because of the increasingly high costs of production in Japan, fueled in large part by the high value of the Japanese yen versus the U.S. dollar and other world currencies.
As far as trying to keep production in Japan, all bets are off, said Rebecca Lindland, director of auto-industry research for IHS Global Insight. The yen is definitely wreaking havoc not only for Nissan, but for Honda and Toyota as well.
Its incredibly difficult to make a profit when you arent building where you sell, but its also important to find stable currency opportunities, or your products are going to be more expensive and the price tags uncompetitive, particularly in developing countries, she said. Its especially important now that the Detroit 3 (General Motors, Ford and Chrysler) are doing so well.
Franklin-based Nissan Americas officials wouldnt comment about the possibility of using their U.S. plants to assemble any vehicles for export as far away as numerous markets in Asia. But Japanese media recently reported that Yokohama, Japan-based Nissan Corp. plans to move some production of its Teana premium midsize sedan to the Smyrna plant near Nashville.
Although its not sold in North America, the Teana is available in South America, Asia and other parts of the world. Adding it to the product mix in Smyrna wouldnt be difficult, analysts say, because the car uses the same basic architecture as the Maxima sedan, one of the key products at the Middle Tennessee plant.
If that occurs, the Teana would be the first Nissan vehicle built in Smyrna strictly for export elsewhere, but the volume of shipments would be relatively small, auto analysts said. The cars annual sales are well below those of such popular Smyrna products as the midsize Altima sedan, which recently has been out-selling the one time market-leading Honda Accord.Other exports
But exports from Tennessee could go well beyond the Teana, and include the all-electric Leaf, as well as other electric vehicles and even a new plug-in hybrid that Nissan Chief Executive Carlos Ghosn mentioned as he unveiled the automakers six-year Nissan Green Program this week in Yokohama, Japan.
The new models are expected to arrive by 2015, including the plug-in hybrid, which would be similar in concept to the Chevrolet Volt and the new 2012 Toyota Prius plug-in model.
While there was no word given on where any of the new Nissan green vehicles, including three more all-electric models, would be produced, Smyrna is a good bet to get at least some of them, and could produce significant numbers for export, Lindland said.
Theres a strong possibility they would produce these new electric vehicles in the United States, she said. The yen is not getting any better. They will have to start making decisions now because the situation is not likely to change anytime soon.
Nissan is now expanding the Smyrna facility to begin assembling the Leaf in early 2013, and also is building a $1 billion lithium-ion battery plant at the same site to make up to 200,000 battery packs annually for the Leaf both for local production and export. The Smyrna plant will initially have the capacity to assemble 150,000 of the Leaf cars annually.
Im sure they are looking at the feasibility of exporting the Leaf, particularly since theyre going to have excess capacity at least at the start, Lindland said. Its too soon to say what the real demand will be for the Leaf because they still have infrastructure and supply-chain issues.
Moving production of some models here from Japan for eventual export probably would be a good idea, said Jim Hall, owner of the automotive consulting firm 2953 Analytics in suburban Detroit.
It makes sense, Hall said. But whether they do it depends on more than the value of the yen. They have to be vehicles whose engines are built here, as well. If you have to bring engines over (from Asia), the transportation costs can be prohibitive.
Sales of the Leaf, which went on sale in limited areas last December, have been sluggish so far. The only plant now building the Leaf is in Japan, but the vehicle in on sale in North America, Asia and Europe. A plant is also planned for England, but its not online yet.Capacity available
Nissan has significant unused capacity at both Smyrna and Canton now. As currently configured, Smyrna can build 550,000 vehicles a year, but turned out just 282,500 in 2010; Canton can assemble 400,000, but produced only 230,000 last year.
Canton already has a new product this year, though the 2012 NV commercial van, which began shipping to U.S. dealers in February. They are full-size cargo vans about the size of Nissans Titan pickup, and are the automakers first foray into the U.S. commercial-vehicle market that has been dominated by Ford and General Motors.
The Canton plant, which has three assembly lines, already is working one of them on three shifts, building the Altima midsize sedan. But the second line, which builds the Titan full-size pickup and Armada full-size SUV, runs just one shift daily. The third line began producing the commercial vans in mid-January.
Before getting any vehicles to build and then export overseas, though, Smyrna and Canton may see more models for the North American market that are now built in Japan. One is already slated to move to Smyrna from Japan in early 2013 the Nissan Rogue compact crossover utility vehicle.
Smyrna would seem to be the most logical place to expand production, adds George Peterson, president of the industry research firm AutoPacific.
Smyrna is huge and very flexible, he said. Its already the largest auto plant in the country, and from that standpoint, it can absorb a lot of capacity.