BANGKOK (Reuters) - Nissan Motor Co Ltd (7201.T) said on Friday it is investing 11 billion baht ($358 million) to build a second assembly plant in Thailand that will have an annual production capacity of 75,000 vehicles when it opens in August 2014.
Capacity would eventually be raised to 150,000 vehicles, half destined for the Thai market and half for export.
“Adding 150,000 units of production capacity will not only enable us to raise our competitiveness in the domestic market but will ensure Thailand’s position as a key strategic global export hub for Nissan,” executive vice-president Hiroto Saikawa said in a statement.
Japan’s Nikkei business daily reported in October that Nissan wanted to open a second plant in Thailand to diversify production after anti-Japanese demonstrations in China.
However, Saikawa denied that the recent tension had anything to do with its investment choice. Rather, he said, the investment in Thailand was aimed at boosting Nissan’s growth in the 10-country Association of Southeast Asian Nations (ASEAN).
“The reason we will be investing in Thailand more is because we trust in the growth in the ASEAN region and Thailand. China’s economy is slowing down, but still growing,” Saikawa told a briefing in Bangkok.
“We have no intention of shifting from China ... China is a very important market for us,” he added.
The new plant will be located near its existing facility in Samut Prakarn province, which can produce 220,000 vehicles a year. Both will produce passenger cars and pickup trucks.
Nissan is aiming to have a 15 percent share of the Thai market by 2016, up from around 10 percent now.
The company has revised up its Thai sales target for this fiscal year ending March 2013 to 132,000 vehicles from 127,000.
President Takayuki Kimura said that was due to a government subsidy for people buying their first car, which had pushed up total car sales this year.
“The market will hit 1.3 million. Our original focus before the incentive was 1 million,” Kimura said.
Nissan currently has an annual production capacity of 400,000 units in Indonesia, Malaysia, Philippines, Vietnam and Thailand, which are all members of ASEAN.
Editing by Alan Raybould and Muralikumar Anantharaman