Nissan will become the first Japanese automaker to build cars in Mexico for export to the United States when it starts making 1995 Sentras at Agua-scal-i-en-tes next year, a top company executive said.
Earl Hesterberg, vice president and general manager of the Nissan division of Nissan Motor Corp. USA, said about 20,000 of the 140,000 Sentra compact sedans the company expects to sell here next year will come from Mexico.Nissan's plant in Smyrna, Tenn., will build about 120,000 Sentras, 35,000 200SX models, which replace the two-door Sentra, and about 295,000 pickup trucks and Alti-ma sedans.
This year, about 20,000 Sentras were imported from Japan to augment the Smyrna supply. By shifting the Japanese production to Mexico, Nissan can ease the pinch caused by the yen's rapid rise in value against the dollar.
Japan's largest automaker, Toyota, said this week it would increase U.S. production capacity by 50 percent over the next three years, in part to escape the high costs caused by the strong yen. Honda also plans increases in U.S. production.
Nissan, which lost about $835 million worldwide in the year ending March 31, can't afford to do that, Hesterberg said. But its two plants in Mexico, which have built cars and trucks for the Latin American market, have extra capacity. It makes sense to use them to replace high-cost Japanese production and help satisfy strong U.S. demand for Nissan products.
"Our biggest problem is we don't have enough cars and trucks," Hes-ter-berg said Tuesday.
Nissan's 1993 sales were nearly 18 percent higher than the previous year, and its 1994 sales through August were up 14 percent from a year ago. The company has made money in this country in the past year, Hesterberg said.
"It comes from dramatically increasing the volume."
But he sees no expansion of Nis-san's North American factory capacity for the next three or four years. "We still aren't at full capacity in the U.K. and Mexican plants."
In addition to what it builds at Smyrna, Nissan gets 50,000 Quest minivans a year from a joint venture with Ford Motor Corp. in Avon Lake, Ohio.