Nissan’s China plan includes doubling sales of pickups and SUVs.
Nissan Motor Co. is plotting aggressive growth in China that could catapult that country ahead of the U.S. as the carmaker’s top market in five years.
Nissan’s local joint venture, Donfeng Motor Co., targets boosting annual sales in China by two-thirds, or approximately 1 million vehicles, to 2.6 million vehicles through 2022, the company said.
To get there, Nissan and its Chinese partner, Dongfeng Group, will introduce 40 models, including 20 electrified vehicles, across all brands, from the Infiniti luxury and Nissan mass-market marques to the Venucia and Dongfeng local counterparts, Nissan said.
The company will also add 2,000 dealers across all brands countrywide.
The ambitious goals flesh out the China component of a new midterm plan Nissan unveiled late last year. At the time, Nissan President Hiroto Saikawa outlined only broad revenue and strategic goals under his M.O.V.E. to 2022 plan, saying regional details would come later.
Nissan has yet to specify its targets for the U.S. But the China objective of 2.6 million units will likely dwarf Nissan’s volume in the U.S., which is currently the carmaker’s biggest market.
Nissan’s joint-venture sales in China climbed 12 percent to 1.52 million vehicles in 2017, while Nissan North America’s U.S. volume inched ahead just 1.9 percent to 1.60 million units.
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China and the U.S. are on different growth trajectories, said Jun Seki, chairman of Nissan’s China operations. The China market is expected to continue to expand, although at a slower rate than in recent years, while the U.S. market is widely forecast to slightly contract.
“China will definitely be the largest in the globe,” Seki said at a news conference. “Volume is slightly larger in North America, but the market growth outlook is different.”
To meet Nissan’s 2022 global revenue goals, Saikawa has said the company should reach 8 percent market share in China. Last year, it grew to 5.6 percent, from 5 percent in 2016.
Nissan wants net revenue from China to increase 62 percent to ¥300 billion ($47.6 billion) by 2022. In the same period, Nissan expects to reach China sales of 2.6 million units. That would be enough to place Nissan among the country’s top three auto manufacturers, Seki said.
The push will require a tripling of China sales at the Infiniti and Venucia brands, he said. Nissan also aims to double its China sales of light commercial vehicles, pickups and SUVs.
Electrification will be a key driver, Seki said.
The 20 new electrified models include full electric vehicles as well as nameplates powered by Nissan’s e-Power range-extender hybrid setup. The Nissan brand will get five zero-emissions models. By 2022, electrified vehicles will account for 30 percent of China sales, Nissan said.
A quarter of the Infiniti portfolio will be electrified in 2022, with the premium brand completely electrified by 2025. The Infiniti rollout includes full EVs and e-Power vehicles.
Autonomous driving will be another pillar.
Nissan will begin introducing its ProPilot single-lane automated driving technology to China in 2019. It will launch multilane autonomy by 2021. By around 2025, it will deploy a self-driving technology that can navigate urban roads and intersections.
In addition to introducing more EVs, Nissan’s growth strategy is focused on Venucia, a no-frills local brand Nissan operates in China, as well as boosting sales of light commercial vans and trucks.
China’s auto market has been dominated by General Motors and Volkswagen AG for nearly two decades, with each selling 4 million vehicles last year. Nissan, Toyota Motor Corp., Ford Motor Co. and Honda Motor Co., lag far behind, each selling 1 million-plus vehicles a year.
“We aim to break away from this second-tier group and become a top-3 China automaker,” Seki said in an interview with Reuters.
To generate large enough EV volume, Nissan plans to come up with lower-cost electric vehicles by locally sourcing electric motors and other key EV components from suppliers in China.
In 2019, Nissan plans to launch three such lower-cost EVs under the Venucia name. “We expect EV and e-Power hybrid business to become profitable,” Seki said, without elaborating.
Seki said shoring up Venucia is a must because indigenous Chinese brands will likely collectively sell as many cars as global brands sell in China. Last year indigenous Chinese brands generated sales of 10.3 million vehicles, compared with global brands’ 13.9 million vehicles.
Venucia, which uses retired Nissan platforms and transmissions, last year produced sales of 143,000 vehicles, up 23 percent from 2016.
Seki said Nissan wants to boost Venucia’s annual volume by more than 400,000 vehicles to be able to sell as many as 600,000 vehicles a year by 2022.
Reuters contributed to this report.