MercoPress. South Atlantic News Agency

Toyota, Nissan plan to invest 1.2 billion USD to increase production in Latam

Nissan Chief Executive Officer Carlos Ghosn in Mexico City

Toyota Motor Corp. and Nissan Motor Co. will invest a combined 1.2 billion US dollars to expand production in Latin America amid growing regional and export demand.

Toyota is spending 600 million on a new car plant in the Brazilian state of Sao Paulo, the company said in a statement, and Nissan is spending the same amount to expand Mexican production to build three new models, Chief Executive Officer Carlos Ghosn said in Mexico City this week.

Mexican vehicle production more than doubled in June from a year earlier as the country exported a record number of vehicles, mostly to the US and Europe. Earlier this month General Motors Co. said sales in Brazil may surge 68% to 1 million vehicles by 2014 as growth in Latin America’s largest economy stokes demand.

Toyota will start building 70,000 units a year of a new compact car from the second half of 2012 at the Sao Paulo plant. Overall automobile sales in Brazil hit 3.14 million in 2009, up 11% from a year earlier with Toyota sales a record 95,000 vehicles in Brazil, up 18% year-over-year. Toyota said the new plant will begin operations in 2012 with annual capacity of 70,000 vehicles and will employ about 1,500 workers.

Nissan will produce 300,000 units of the March compact, a four- door sedan and a five-door multipurpose vehicle a year in Mexico, 80% of which will be distributed in the Americas, Ghosn said. Production of the March will begin next year, he said.

Nissan with 23.5% has the largest share in Mexico and was the No. 1 producer of vehicles last year, with 355,414 units. “This market share is not only sustainable but should continue to grow,” Ghosn told reporters in Mexico City.

While globally automakers will have a “record year” in 2010, producing as many as 70 million vehicles, industry sales in Europe will drop 7 percent to 9%, Ghosn said. He forecast Nissan and partner Renault SA, which has a controlling stake in the Japanese automaker, will sell a combined 7 million vehicles worldwide this year.

Ghosn also said Mexico’s rising drug-fueled violence is “not an obstacle” to investing in the country. The company has taken “minor” precautions, he said.

GM surpassed Nissan as the largest producer of autos in Mexico this year. In the first five months, GM produced 234,940 vehicles compared with 190,173 for Nissan, according to statistics from the Mexican Auto Industry Association.

For the first five months of the year, Nissan produced 56,162 autos for sale in Mexico. GM produced 48,216 in Mexico for sale in the local market.