Nissan May Export Larger Cars to U.S.
The new president of Nissan Motors said Monday that the U.S. auto market may soon be saturated with subcompact cars and that Nissan is thinking of introducing larger models.
Yutaka Kume said Nissan has more than one new model under consideration, but he gave no details. The largest model currently exported by Nissan to the United States is the Maxima, which is classified as a mid-size car.
It was unclear whether the company would simply increase exports of the Maxima or introduce entirely new models to the U.S. market. Nissan produces at least two models larger than the Maxima for the Japanese market.
Kume also said, at a news conference for the foreign press here, that Nissan is studying whether to expand its current U.S. assembly plant at Smyrna, Tenn.
“We must study very carefully whether the present size of our Smyrna plant is sufficient,” he said.
Kaichi Kanao, vice chairman of Nissan, said the company will consider increasing next year the level of production at its Tennessee plant, now 100,000 units a year.
Takashi Ishihara, Nissan’s chairman, backed up Kume’s remarks about fears of a glut of Japanese small cars in the United States. He said he does not expect Japanese firms to be able to sell easily the 450,000 additional cars that the Japanese government added this year to its self-imposed limit on exports to the United States.
“In the fall, I think competition will become fierce,” he said.
Ishihara made the comment in explaining why he went astray Jan. 19 in predicting that Japanese car exports would increase by “only 10%--at most 15%” if export restraints were lifted April 1.
Same Conditions
The government of Prime Minister Yasuhiro Nakasone in March set a limit of 2.3 million on car exports for the Japanese fiscal year (April, 1985-March, 1986). This was an increase of 24.3%, nearly twice the amount that Ishihara had predicted. Ishihara said he based his January prediction on an assumption that marketing conditions for Japanese cars in the United States would not change.
“I did not take into account an increase in sales that would result from price cutting and competition in advertising,” he said.
Asked if he thought the new export limit was not really a restraint on Japan’s sales in the American market, as has been charged by American critics, Ishihara paused and then said: “It was decided upon within the framework of self-restriction. It is a form of limitation.”
Ishihara, who is also president of the Japan Automobile Manufacturers Assn., came as close as any auto executive here has come to admitting that the 24.3% increase represents about all that the Japanese manufacturers can expect to sell in the United States in fiscal 1985.
Kume disclosed that the government of Taiwan has ruled that, if Nissan is to acquire 25% of Taiwan’s largest auto maker, Yue Loong Motor Co., it must export, beginning in 1988, at least 25% of any increase in production by Yue Loong.
Kume said Nissan’s most important task will be to strengthen its domestic sales, with better products and a stronger sales network, to close the gap between it and Toyota.
Toyota officials confirmed that the company was conducting feasibility studies to invest in a plant in the United States on its own--and that production of a larger-size car was included in those studies. Japanese newspapers reported that Toyota was considering building a plant either in the Midwest or the South to manufacture between 200,000 and 250,000 cars a year beginning in 1988, in addition to the 250,000 cars that Toyota and GM will be manufacturing at their joint venture plant in Fremont, Calif., when that plant reaches full capacity.
