As the largest Japanese auto manufacturer in China, Nissan Motor Co. is expected to announce a new plant in the northeastern city of Dalian that will cost $785 million. This is only part of a $4.7 billion investment in China to take place before the end of 2015. As China now represents the world’s largest auto market, Nissan wants to ensure it can compete with the likes of general Motors and other global manufacturers that are looking at the growing Asian market.
Up to now, it’s been interesting as the large foreign auto makers have divided China into five separate territories, but now they are beginning to enter each other’s so-called turfs. Germany’s Volkswagen has held a tight grasp on the eastern and northern part of China, while Japanese rivals have controlled the south. But now VW is starting construction on a plant in the southern province of Guangdong. And on the other side, GM has mostly remained in Shanghai, but is now building a facility in Nissan’s territory of Wuhan. Ford is emerging out of its southwest area to build a plant in Hangzhou, which is close to GM’s Shanghai.
By putting a production plant in Dalian, northeastern China’s wealthiest coastal city, Nissan will be able to directly compete with VW and Toyota, who have been constructing their popular Jetta and Corolla models there for years now. Analysts point out that as the port city is not far from Japan, it will be much cheaper and faster to send parts to Dalian rather than Wuhan. Back in May, Nissan announced that its luxury line Infiniti would begin production in China for the first time at a plant in Xiangyang, so its clear at this point that Nissan is committed to its expansion into China.