CARMAKER Nissan has joined with India’s second-largest truck maker, Ashok Leyland, to invest £250m to set up a vehicle manufacturing unit that will target both the Indian and international markets.
Ashok Leyland, based in the southern Indian city of Madras, will own 51% of the manufacturing facilities, while Nissan will have the remaining 49%. Production, of vehicles lighter than eight tons and products for them, will start from 2010, the companies said in a statement. In the medium term, production is expected to increase beyond 100,000 units annually.
“The [light commercial vehicle] business is one of Nissan’s most important global growth engines ... We see India emerging as an important hub in Nissan’s global LCV manufacturing footprint,” said chief executive Carlos Ghosn.
Meanwhile, the company, which has 4,300 staff at its Sunderland plant, saw its shares rise the most in seven years on the Tokyo Stock Exchange yesterday after it reported higher operating profit and analysts raised their ratings. Nissan’s stock jumped 14.2% after Mr Ghosn said the company’s second-quarter operating profits were up by the most in more than three years and ending what he had called a crisis.
“The results were surprisingly good and made investors realize that they had been overly pessimistic about the company’s performance,” said analyst Mitsushige Akino at Ichiyoshi Investment Management Co. “We’re seeing a knee-jerk reaction to Nissan’s earnings results.”
The carmaker’s shares have fallen 10.5% so far this year compared with a 3% decline in the benchmark Nikkei 225 Stock Average.
Nissan boosted operating profit 12% to 218.7 billion yen (£1bn), helped by demand in Russia, China and the Middle East. Net income fell 27% after gains from asset sales and tax breaks in the year-ago period.
The company plans to introduce 11 new or redesigned vehicles this fiscal year, including the GT-R, its most expensive sports car, which goes on sale in Japan in December.
In a period when the world’s big car manufacturers are finding life quite tough, Nissan appears to be getting stronger – though first-half pre-tax profits were flat at £1.5bn and the bottom line after-tax figure fell some 22.5%, though Nissan said this was partly due to higher taxes than previously.