Nissan still eyes US expansion image

Despite spending billions to open new plants in both Brazil and Mexico, Nissan Motor Co. will continue investing in its U.S. automotive manufacturing operations, according to the maker’s CEO.

But where plants in Tennessee and Mississippi will largely focus on local demand in the United States, Chief Executive Carlos Ghosn said Mexico is rapidly becoming not only its primary export hub in the Americas but likely will soon become the largest export base, even surpassing the one Nissan has back in Japan.

“If you ask me if you will see future expansion in the United States for the U.S. market, the answer is yes,” said Ghosn during a media roundtable in Aguascalientes, Mexico, where he attended the formal dedication of Nissan’s new, $2 billion assembly complex.

The two U.S. plants have steadily expanded over the years and now produce a wide range of Nissan products. They’re also becoming more important export bases with 14% of the vehicles produced in Tennessee and Mississippi going abroad this year – up from 12% in 2012. In fact, Nissan expects to double the number of export markets served by the U.S. assembly lines by 2015, with the Mississippi plant soon to become the sole global source for the next-generation Murano crossover.

While Nissan officials declined to provide a specific number, industry sources suggest that labor costs for the new Aguascaliente plant and the maker’s two other Mexican assembly lines is about 20% of what it pays north of the border. But another advantage is that Mexico has negotiated free trade agreements with over 100 countries in recent years, a factor that can further improve the business case for using the country as a central export hub.