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Nissan Forges on with Mexico Plant Despite Trump Warnings

Feb. 9, 2017
Nissan, which posted a fall in nine-month profit, said the plant is on track to start producing vehicles this year, adding to its total of 800,000 vehicles made in Mexico every year.

TOKYO — Nissan said Thursday that it is pressing ahead with plans for a new plant in Mexico, despite President Donald Trump rapping rival Toyota over a factory in that country.

Nissan and Daimler broke ground in 2015 on the facility in Aguascalientes, in central Mexico, saying they would invest around $1 billion on a factory that would make vehicles for their Infiniti and Mercedes-Benz brands.

Nissan, which posted a fall in nine-month profit as it handed out more incentives to sell cars in the U.S., said the plant is on track to start producing vehicles this year. The Japanese automaker has several other production plants in Mexico, where it makes more than 800,000 vehicles annually. 

"As of today, we are on track, in line with the schedule and by the end of the fiscal year our new Infiniti cars will be produced there," Nissan vice president Joji Tagawa told a media briefing Thursday, referring to the new plant.

The comments came as Nisshinbo Holdings, another top Japanese firm, said it has dropped Mexico as a possible location for its new auto parts factory, citing Trump's protectionist outbursts.

Japanese Prime Minister Shinzo Abe heads to Washington on Thursday for meetings with Trump aimed at cementing ties and underscoring his country's commitment to investing in the U.S. Trump has assailed Japan for allegedly devaluing the yen to boost exports, grouping it with other countries he says are taking "advantage" of the U.S. He also targeted Toyota with strong criticism of its ongoing project to build a new factory in Mexico, threatening it with painful tariffs if its goes ahead.

The Japanese auto giant has stuck to its Mexico plans, but said last month it intends to invest $600 million and create 400 jobs at one of its U.S. plants.

Also Thursday, Nissan said its April-December period net profit dropped 8.5% to 414.2 billion yen ($3.66 billion), while sales and operating profit fell 7.6% and 14.3%.Nissan moved 4.0 million vehicles globally in the nine months, edging up nearly 3% from the same period a year ago.

Unit sales rose in North America and China, the world's biggest car market, but Nissan said it sold fewer cars in Japan during the period, with sales falling about 10%.

Nissan's struggles at home were partly linked to the temporary suspension of its mini-car sales owing to a fuel-economy rigging scandal at partner Mitsubishi Motors. The firm blamed the drop in its bottom line on the cost of offering incentives to win over drivers in the US and the impact of currency fluctuations.

Nissan said it still expects a net profit of 525 billion yen ($4.64 billion) for the fiscal year to March.

Copyright Agence France-Presse, 2017

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