New B11.6bn Nissan plant will double output

Japan's Nissan Motor Co will double its production in Thailand with a new 30-billion (11.6-billion-baht) factory near Bangkok to meet heavy eco-car demand.

The Nikkei Business Daily said the new facility in Samut Prakan province will be near the company's existing Nissan plant, which emerged largely unscathed from record flooding late last year that dented Japanese firms' production here.

However, a parts shortage forced the plant to halt production last year.

The new factory, scheduled to open in 2014, will see annual production of 100,000 vehicles, with the number eventually rising to 200,000 or roughly equivalent to Nissan's current Thai production, said the Nikkei report.

In the last fiscal year ending March 31, Nissan made 190,000 vehicles here.

The goal is to more than double its share of the Thai vehicle market to 15% by fiscal 2016, said the report.

The move comes as Japanese carmakers cut production in China on the back of a sales slump stoked by tensions between Beijing and Tokyo over a group of islands in the East China Sea.

A spokesman for Nissan Motor (Thailand) would say only that the parent company will announce a new investment plan for Thailand on Nov 2.

That plan will include details for strengthening Nissan's competitiveness in the growing Thai automotive market, he added.

Nissan earlier was reluctant to expand its Thai operation despite strong demand for its products locally and abroad.

After the March eco-car was introduced in March 2010, Nissan received an overwhelming number of orders from Thai customers.

Production capacity at the Samut Prakan facility has not been able to keep up with the strong demand.

Nissan temporarily resolved the problem by hiring Mitsubishi Motors (Thailand) to help assemble the Nissan Navara one-tonne pickup truck this year in order to assemble more eco-cars itself.

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Writer: Santan Santivimolnat & AFP