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Nissan to build Micra at Renault Plant in France

April 26 – Yokohama – Nissan announced Friday that it will make the replacement for the current Micra at a Renault plant in Flins, France, from 2016, using available Alliance capacity.

Nissan’s manufacturing capacity in Europe and India (the current source for the Micra) will be fully utilized ahead, so Renault building the car at its Flins plant cuts capital expense, foreign exchange exposure, and working capital through shorter supply chains.

The Nissan Global Media Center spoke with Trevor Mann, Chairman of the Management Committee of Nissan Europe, on the plan.

Media Center:

This is a significant announcement for Nissan and Europe. What prompted the move?

Trevor Mann:

Nissan embarked on its own program, the so-called Nissan Power 88, a growth program for Nissan. The first “8” being 8% market share, the second (8) 8% consolidated operating profit, so we’re looking for sustainable growth. The market is very, very challenging at the moment, not only in Europe, but on a global basis.

What we have to do is look at the investments we are making to ensure we make prudent but very appropriate investments for the market. Reviewing the situation, we’ve looked at our growth within Europe, and we’ve decided that the best option for Nissan, the best option for the Alliance, was to make this investment in the French factory in Flins.

Media Center:

In terms of the Alliance, some production ties already exist. How will this complement efforts?

Trevor Mann:

The significance of this step is obviously huge. It further embraces the Alliance, and I think people would be questioning if we weren’t doing things like this – “What is the value of the Alliance?”

This is one of the synergy effects. Already we have huge synergies between the two companies – over 2.5 billion euros. That is fundamentally based on the significant powertrain exchange between Renault and Nissan. Nissan takes a lot of diesel engines, and a lot of manual gearboxes. Renault takes some petrol engines and automatic transmissions. We make axles in combined facilities, for example. In addition to that, we also have some sharing globally.

In our South African plant we make vehicles for Renault for the South African market. In Europe we make LCVs in Barcelona for Nissan and Renault. And, in Batilly we make LCVs for Nissan and Renault.

This is significant, as this is probably the first passenger vehicle-sharing that we have in Europe, and it means an awful lot. It means that we are producing cars closer to the market. We may have more flexibility for the European customers.

It also means much-needed social benefits in France in terms of employment, and all in all this is a win-win for the Alliance, and really cements the Alliance synergies as we move forward in the Nissan Power 88 program.

Media Center:

For the new Micra, what will this mean for consumers?

Trevor Mann:

The Micra has a very long heritage in Europe. We’ve been selling it in a number of guises, number of generations, for many years, and it is really synonymous with the word “Nissan”. What we’re looking to do by bringing production of this back into Europe – we can be more flexible, we can be shorter in our time to market, we can be more reactive to European customers, so all in all, it’s a win for Renault, it’s a win for Nissan, and it should be a win for the European customers.

Media Center:

Will this move give Nissan and the Alliance an advantage in Europe’s challenging environment?

Trevor Mann:

Europe is extremely volatile at the moment, particularly southern Europe, where the markets are particularly depressed. A lot people talk about the older, mature Western European countries as being high-cost countries, but if you look at what’s happened in Sunderland, it’s a very competitive plant, and the result of its competitiveness is that it’s full to capacity.

The Barcelona plant has gone through a significant change over recent years, and recently signed a very competitive collective agreement and going forward this plant is also full. As we know, Renault in France has recently gone through collective agreement changes, and this shows a significant change in how we can be competitive in Europe for the European market, how we can balance our currency footprint, how we can be close to the market, and how we satisfy those European customers.

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