Nissan to boost China plant automation as costs rise

• Source: Gasgoo
• [13:42 June 22 2010]
• Comments

Nissan Motor's Chinese venture is investing in plant equipment to increase automation of assembly lines to reduce its reliance on labor as new minimum wage laws and a looser yuan are raising costs at Chinese factories, Bloomberg reported today.

Nissan, Japan's third-largest carmaker, said it wants to boost productivity in China as labor costs increase. Its local venture with Dongfeng Motor Group makes the Teana sedan and Tiida hatchback and sold 756,000 vehicles last year. Nissan won't be leaving China, a company executive said.

The venture is building a 5 billion-yuan ($732 million) plant in Guangzhou that will be more automated, Nissan spokesman Mitsuru Yonekawa said. The factory is scheduled to open in 2012. The automation rate in China is on the rise, as it's still lower than at Nissan's factories in Japan, he said.

The Dongfeng-Nissan venture also owns Zhengzhou Nissan Automobile Co., which makes sport-utility vehicles. It spent about 1 billion yuan setting up a second production line with the latest equipment at its Zhengzhou plant.

China's central bank said June 19 it will allow increased "flexibility" for the yuan, abandoning a peg to the dollar that was adopted during the global financial crisis to shield exporters.

The appreciation of China's currency may also slow the plans of Toyota Motor and Honda Motor to export Chinese-made vehicles, Bloomberg reported yesterday.