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Nissan Says Speedy Progress in BRIC Markets Key

Reuters
Sunday, 13 Jan 2008 | 7:37 PM ET

Conquering the fast-emerging markets of Brazil, Russia, India and China, commonly referred to collectively as BRICs, is the main priority for Nissan Motor, a top executive said on Sunday.

Like many of its domestic peers, Japan's third-biggest automaker is racing to catch up with European and U.S. front-runners in the four fast-developing markets to secure future growth as its main U.S. and Japanese markets saturate.

"One of the major points of concern is the speed in BRICs," Executive Vice President Carlos Tavares, in charge of corporate planning, told Reuters in an interview at the North American International Auto Show.

Nissan , held 44 percent by France's Renault, has been busy announcing plans for growth in all four markets, including construction of its first Russian plant in St. Petersburg.

Last week, however, it hit an unexpected snag in India, with local automaker Mahindra & Mahindra pulling out of a planned partnership for joint production with the Franco-Japanese alliance that is headed by CEO Carlos Ghosn.

"We need to work like hell to be ready (for our planned big push) in India in 2010," Tavares said. "We're in the same situation as we were in China five or seven years ago: we need to enter now in order to be relevant in the market."

Tavares said he did not expect Mahindra's decision to slow down Nissan's plans significantly, if at all, in India.

Initial talks had helped build a good relationship with the Tamil Nadu government as it prepares to go ahead and build a factory with Renault in the port city of Chennai, he said.

Describing the status in the other three markets, Tavares said the priority in Russia was to quickly match supply with runaway demand so as not to lose the brisk sales momentum.

Nissan's domestic rival Toyota Motor began production at its first Russian factory last month, while Nissan's is not due until next year.

In China, the rapid fragmentation of customer preferences meant Nissan would need to beef up its product line-up, particularly in the crossover and SUV segments, Tavares said. "In terms of the diversification of consumer needs, some experts say China is the most competitive market in the world," he said.

In Brazil, Tavares noted Nissan had less than a 1 percent market share versus the roughly 5 percent it had worldwide.

Late last week, Nissan announced it would supply Chrysler LLC with a small car based on its Versa model to be sold in South America, including Brazil, and that was one strategy to maximise Nissan's resources, Tavares said.

"In Brazil, we decided that we would go with the Sentra for the sedan market, and only launched the Versa hatchback. By supplying a sedan version of the Versa to Chrysler, we would maximise our capacity without running into the issue of brand differentiation. It's a
win-win," Tavares said.

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