Soon after announcing ambitions to take production capacity in the Americas past 2 million units in 2014, automaker Nissan Motor Co. Ltd. (NSANY) is vying for the top spot in Light Commercial Vehicles (LCV) market by 2016. Nissan does boast a strong LCV portfolio, ranging from mini-LCVs to 7.5-ton trucks, which may help the automaker achieve its target. Other factors that should help include foraying into new markets, strategic collaborations and growth in traditional markets.
Pushing the Sales Volume
Nissan is optimistic about high sales volume in 2013, largely driven by the new-generation compact van NV200, whose sales is expected to touch 200,000 units by the end of fiscal 2013 (April 2013-March 2014). Nissan’s LCV sales crossed the 1 million units’ milestone in fiscal 2011 and increased to 1.14 million units in fiscal 2012.
Nissan’s LCVs are designed in a manner that satisfy customer needs and fulfill the local requirements. The vehicles offer low running costs together with best-in-class quality and reliability.
Power 88 Plan
Nissan’s focus on LCV sales and production will support the automaker in achieving its Power 88 mid-term plan. Under this six-year business plan, Nissan expects to foray into new markets and segments from 2011 to 2016. The company also has a target to achieve 8% global market share with operating profit of more than 8% by fiscal 2016.
Nissan also plans to offer an electric version of compact NV200 named as e-NV200 from the beginning of 2014. The addition of this zero-emission passenger car will expand the LCV portfolio .
2M Production in 2014
Moreover, in a bid to tap the growth opportunities the American markets have to offer, Nissan is aiming to take its production capacity in the region past 2 million units in 2014. The company also wants to minimize the adverse effects of currency translation. The boost in production is supported by enhanced capacity at its U.S. plants and the new facilities in Mexico and Brazil.
Our Recommendation
Nissan currently carries a Zacks Rank #1 (Strong Buy). Other companies in the automobile sector that are worth considering are Volkswagen AG (VLKAY), Peugeot S.A. (PEUGY) and Fuji Heavy Industries Ltd. (FUJHY). Fuji and Volkswagen carry a Zacks Rank #1 (Strong Buy), while Peugeot carries a Zacks Rank #2 (Buy).
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