Nissan Bets Big on China as Europe Market Contracts

Nissan Motor is concentrating all its investments and increase in capacity over the next several years to develop the Chinese market, the company’s CEO Carlos Ghosn told CNBC's Kaori Enjoji at the Beijing Motor Show on Monday, even as he gave a pessimistic outlook for Europe.

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China is already the single-largest market for the automaker, with nearly a quarter of the company's global sales coming from the country.

Last week, Nissan announced it would begin manufacturing two new Infiniti models in China and, on Monday, announced the launch of the D50, a car to be sold under the new Venucia brand, which is produced with its joint-venture (JV) partner Dongfeng Motor.

Ghosn said Nissan would also be introducing a new electric vehicle in China after the government announced last week that it wanted to have 5 million electric vehicles on the road between now and 2012.

"I was expecting something strong coming from the China government and I was not disappointed," Ghosn said in Beijing. "It's a bold move, which will position China in the avante garde of zero-emission transportation, we have the technology, we have the product, we are ready to play, we are ready to contribute."

Nissan won’t be rolling out its Leaf electric vehicle in China, instead, the Chinese version will be sold under the Venucia brand, Ghosn said, and the company would transfer its electric-vehicle know-how to the JV with Dongfeng.

Nissan would move “very, very fast” in launching the new electric vehicle, Ghosn added. He said the product was ready, but the company needed to bring the local production on-line.

Europe Contraction

Ghosn expressed pessimism about the European market, saying he didn't expect a turnaround in the next three years.

"We are going to see at least three tough years in Europe. The year 2012, without any doubt, with our expectation the market is going to shrink 3-4 percent," he

said. "We would be very happy if the market was stable for the following two years, but we have no positive expectation from the european countries for the next three years."