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Nissan's big drive for global growth

Tuesday, 12 Nov 2013 | 10:32 AM ET
Mexico to export over 3 million vehicles this year
Tuesday, 12 Nov 2013 | 7:32 AM ET
Mexico is seeing an investment totaling $10 billion in new automobile manufacturing plants, reports CNBC's Phil LeBeau.

With auto sales around the world surging to a record level, Nissan is betting a new, world-class assembly plant in Mexico will position the Japanese automaker for a new wave of growth.

The company's new plant in Aguascalientes, Mexico, has the capacity to build 175,000 new cars every year, with 90 percent of them being exported, mostly to the U.S.

New Sentra sedans are already rolling off the assembly line.

Once production from the new facility is combined with Nissan's two other plants in Mexico, almost 10 percent of the Japanese automaker's vehicles will be built in Mexico.

(Read more: Mexico stakes claim as hottest hub for auto production)

It's the latest sign of just how important Mexico has become for Nissan and the auto industry as a whole.

Mid-Mexico red hot

While Nissan is opening its new plant in 350 miles northwest of Mexico City, other automakers are close to finishing new plants of their own.

Honda and Audi will soon have new facilities in mid-Mexico, where the combination of logistics and ample, lower-wage labor have become an attractive combination.

An employee carries puts the finishing touches on a car at the Nissan Motor Co. plant in Aguascalientes, Mexico.
David Rochkind | Bloomberg | Getty Images
An employee carries puts the finishing touches on a car at the Nissan Motor Co. plant in Aguascalientes, Mexico.

"Mid-Mexico is growing by leaps and bounds," said Michael Robinet with IHS Automotive. "Mid-Mexico could easily push 4 million units per year by the end of this decade."

Nissan is currently the largest auto producer in Mexico, building 684,000 vehicles in the country this year. That leads Volkswagen and General Motors who also have large footprints in this country.

Ghosn curbing electric vehicle estimates

Nissan CEO Carlos Ghosn is opening the facility in Aguascalientes as he pulls back estimates on how quickly sales of electric vehicles will grow worldwide.

After initially setting a goal of Nissan/Renault selling 1.5 million EV's by 2016, Ghosn is now dialing back his forecast dramatically.

The CEO said he now expects Nissan to have EV sales of just 500,000 by 2016. The bulk of those electric vehicles have been the Nissan LEAF. So far, about 120,000 LEAF EV's have been sold.

This year, LEAF sales in the U.S. are up 166 percent, topping 18,000. Sales of the electric car have picked up since Nissan cut its price earlier this year to spur sales.

—By CNBC's Phil LeBeau. Follow him on Twitter @LeBeauCarNews.

Questions? Comments? BehindTheWheel@cnbc.com.

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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