Nissan To Move Production Of Key Subcompact To Thailand-Nikkei

Nissan Motor Co. (7201.TO) plans to transfer production of its March subcompact to the auto maker's Thai unit as part of a structural overhaul to deal with the strong yen and sluggish sales, the Nikkei reported in Friday morning editions. The economic downturn, coupled with a strong Japanese currency that has stayed at around 90 to the U.S. dollar, prompted Nissan to decide on the production shift, making it the first auto maker to move production of a top-selling model overseas. Nissan now manufactures the March for the domestic market at one of its factories in Kanagawa Prefecture, selling about 47,000 units a year. When the vehicle is due for a full remodeling in 2010, Nissan will cease production in Japan and import all units for the domestic market from Thailand. The redesigned March, to be sold in Japan and emerging markets in Asia, will use a chassis developed with French partner Renault SA (13190.FR). Production costs for the car will be cut by about 30% by procuring more parts locally - about 90% - in addition to using a common chassis. The unit in Thailand was chosen because that country offers tax breaks for the production of fuel-efficient small cars. Nissan intends to maintain output at the Kanagawa factory by rolling out electric vehicles and newly developed subcompacts there starting in 2010. Similarly, Nissan will shift production of the Micra - the March for overseas markets - from the U.K. to India in 2010, when that vehicle is slated for a full makeover of its own. In addition, Nissan will reduce from 60 to 48 the number of new and redesigned models to be introduced over five years starting in the current fiscal year. It plans to forgo a full remodeling of its Cima luxury car and discontinue development of a new sports car. Nissan also intends to postpone the opening of a plant in Morocco, to be built jointly with Renault, initially scheduled for 2010. And construction plans for factories in India and Russia will be downsized or delayed. The company is considering eliminating bonuses for its executives for the current fiscal year and intends to sharply reduce their pay for April and afterward. It paid a total of Y2.23 billion ($24.9 million) to 10 directors for fiscal 2007. Nissan had initially projected that consolidated operating profit for fiscal 2008 would fall about 30% on the year to Y550 billion, but downgraded the forecast to Y270 billion last October. The automaker will very likely end up logging an operating loss because sales have continued to slump globally and the yen has appreciated further. Contact: Pauline Kee, [email protected] Mitsuru Yonekawa, [email protected] Tristan Agustin, [email protected] NISSAN MOTOR CO., LTD. Global Communications CSR and IR Division Global Communications TEL: +81-3-5565-2141 FAX: +81-3-3546-2669

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