Nissan plans new Ghana plant to double Africa production

TOKYO — Nissan Motor will open an auto assembly plant in Ghana by 2022 as part of efforts to double its Middle East and African production to capture growing demand, Nikkei has learned.

The cost of the facility, which will have the capacity to produce 50,000 to 60,000 vehicles a year, has not yet been set.

The Japanese automaker in February announced another plant in Algeria with a planned capacity slightly above 60,000 units. Regional capacity is expected to rise to nearly 200,000 units by fiscal 2022.

Nissan is recalibrating its focus after the numbers-driven mindset of former Chairman Carlos Ghosn. But the company plans to invest aggressively in Africa, where the young account for more than half the population, in view of its ample growth potential.

The automaker’s dealerships across Africa are also projected to increase by as much as 80%. In Nigeria, the biggest auto market in Western Africa, Nissan showrooms will triple to 45.

The company aims to raise its market share in the Middle East, Africa and India region from less than 4% last year to 8% in 2022. Nissan also plans to double its operating profit margin in the area to more than 10%, according to Senior Vice President Peyman Kargar, and to roll out electric vehicles in the Persian Gulf nations for the first time.

Nissan will consider collaborating with Renault on production and procurement in Algeria, where its French partner commands a market share of 60%.

Compatriot Toyota Motor this year moved its African sales and marketing operations — except for South Africa — to group trading company Toyota Tsusho, which has a broad sales network.

Japan’s top automaker agreed last year to cultivate the African market with Suzuki Motor. Suzuki will supply compacts built in India for sale by Toyota in Africa under an original equipment manufacturing arrangement. Toyota sold 190,000 units in Africa last year, and Suzuki around 25,000.

Research company Frost & Sullivan projects that new-car sales in Africa will double from 2016 levels to 3.26 million in 2025, putting the continent on a par with Germany’s market size, currently the world’s fifth largest.

But despite the robust market growth, local production has been relatively limited. Auto production in Africa for 2017 is estimated at 2.5 million units, according to PwC Consulting. French automakers have an advantage in the region, operating plants in Northern Africa. In 2017, Renault produced 600,000 units in Africa while PSA Group made 360,000, compared to around 100,000 each by Toyota and Germany’s Volkswagen.

Encouraged by Chinese President Xi Jinping’s Belt and Road infrastructure initiative, automakers like Zhejiang Geely Holding Group and FAW Group are also stepping up African operations. The Chinese companies currently have factories in South Africa and Ethiopia.

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