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Nissan SA boosts output

2009-04-17 10:04
Pretoria - Nissan South Africa will boost production and expects to increase its local market share despite a domestic and global economic slowdown, managing director Mike Whitfield said.

Local car sales have been in negative territory in the past 18 months, falling by 30.1% in March, and the global slump has slashed vehicle exports.

Nissan SA expects new product lines to boost output to about 40 000 units from 28 000 in 2008.

"We've started production of the new Renault Sandero and the NP200 pickup will take up capacity in the plant," he told Reuters Television in an interview.

He said the company was exploring further production opportunities in countries such as Angola and Nigeria.

"Our market share came up to around 7.5% last year on the back of some lack of products in certain key segments. This year we expect to be just over 8%... which means we are in a growth phase."

Thousands of jobs are on the line in the automotive industry and vehicle manufacturers and car parts producers have approached the government for loans.

Whitfield said Nissan S.A. had escaped the worst, but was not unscathed and has shed 180 jobs.

"If we look at the job loss scenario we are very fortunate in that on the factory side, because of the increase in production, we are not as affected as some of the other manufacturers," he said.

"However, in terms of our salaried workforce, we have reduced that by 180 people ... which is difficult and we try to keep it to the absolute minimum because our first objective is job retention."

Other vehicle manufacturers in South Africa include Toyota, General Motors, Ford Motor, Volkswagen AG, and Daimler AG.

Mercedes-Benz SA, a unit of Daimler, said it would shut its plants in East London for four weeks in April. Volkswagen cut 400 jobs and GMSA said it would retrench 700 people. The industry employs 116 000 countrywide.

Analysts do not expect the car industry to recover this year despite an expected continuation of a monetary loosening cycle which has yielded 250 basis points in cuts since December.

"As we enter 2009, we believe we have far greater understanding of what the reality is," he said.

"As such, we've put the company in the right shape to make sure we can emerge from the current scenario a lot stronger," he said, expecting an improvement in conditions in 12 to 18 months.

International ratings agency Fitch said two weeks ago the credit profiles of local automotive companies are expected to come under increasing pressure over the next 18 months, and that a recovery in market conditions was not expected prior to 2011.

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