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Nissan minivans heading from US to China
(Agencies)
Updated: 2005-08-01 15:34

Nissan began shipping its Quest minivan Friday to what many believe is emerging as the hottest auto market -- China.

The product produced in Mississippi and tweaked for the Chinese market will leave by ship from California harbors for the Asian country, which is projected to have 100 million new buyers over the next decade.

"China is viewed as the single largest untapped auto market in the world," said Patrick Anderson, principal for consulting firm Anderson Economic Group in Michigan. "Every major automaker is planning to satisfy the projected increase of automotive buyers there."

Aiming the Quest at Chinese consumers could bump production of the model at the Canton, Miss, plant. The Quest hasn't experienced domestic sales as healthy as the Mississippi-made Titan pickup.

On a larger scale, the move complements Nissan Motor Co's three-year Value-Up business plan targeted at reaching sales of 4.2 million vehicles globally by fiscal 2007.

For now, it doesn't appear that China's unsteady economy, fluctuating from government-imposed raised interest rates meant to cool growth and high gas prices, will create financial risks for Nissan. The recent announcement that China will no longer peg its yuan to the dollar isn't expected to be of major concern either.

"The entire issue of the Chinese market is risky, but it's a risk that almost every auto manufacturer in the world is taking," said analyst George Peterson of California-based AutoPacific Inc, a marketing and consulting firm. "The big minivan player right now is GM in China. It's a fairly slim market."

"It's not the million units sold here," said analyst Michael Robinet of CSM Worldwide Inc. "But Nissan's getting in on the ground floor. It makes sense." Nissan won't say what it cost to modify the minivan to meet Asian government standards.

Changes to the vehicle have been slight. There are corner lights on the front fenders, red tinted taillights have become clear, and rear fog lights added below the bumper, said Dave Boyer, vice president of manufacturing in Canton.

Because of China's rugged countryside, there are some structural alterations in the rear corner of the minivan and pillars at the edge of the windshield to withstand the terrain.

Fewer than 1,000 of the vehicles have been assembled in Mississippi for the overseas shipment. "At this point, in terms of volume for the vehicle, we're at the very early stages," Boyer said.

Canton's production schedule will adjust to China's demand.

The minivans will leave Mississippi already assembled. They will be delivered to California by rail, though it's unclear how often.

The affluent population in Beijing or Shanghai could be possible buyers of the Quest when it arrives, said Peterson.

"It's going to be very expensive over there, even with the yuan revalued against the dollar," he said.

Yet, the automaker could be taking a financial loss when comparing the minivan's US value with whatever its cost will be in China, Anderson said.

However, he said, Nissan's move is obviously twofold: to be in China and to leverage its worldwide investments.

The company also exports a small fleet of Canton-made Armada sport utility vehicles to the Middle East. This week, Nissan reported first-quarter sales of US$19.3 billion, a 13 percent jump from the same April-June period a year ago.

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