Nissan Targets Doubling of Sub-Sahara Sales on Small Cars

Nissan Motor Co. (7201), Japan’s second-biggest carmaker, said its small passenger models will lead sales gains in Africa south of the Sahara as economic growth makes people wealthier and enables countries to upgrade roads.

Nissan wants to double vehicle sales in sub-Saharan Africa to 220,000 units by 2016, Mike Whitfield, managing director of Nissan’s South African business, said in a phone interview. The Micra, Almera and Sentra cars will be added to the existing range that also includes sport-utility vehicles, commercial vans and pickup trucks to meet rising demand in Ghana, Nigeria, Angola and eastern Africa, he said.

“What we see in Africa is a very strong emerging middle class, which creates a lot of opportunity and strong growth in areas of the market, such as small, B-segment passenger cars,” Whitfield said from his office in Pretoria on June 25.

Nissan is seeking growth elsewhere in Africa as consumer spending slows in South Africa, the continent’s biggest economy, amid rising unemployment. The country’s car market will probably increase 4 percent to 5 percent this year, Whitfield said. That compares with growth of 9.2 percent in 2012, the slowest gain since 2009. Toyota Motor Corp. (7203) and Volkswagen AG (VOW), the world’s biggest and third-ranked carmakers, are the largest sellers in South Africa.

Export Production

Nissan has an assembly plant with a workforce of about 2,500 people in Pretoria, South Africa’s capital. The factory assembles 1-ton pickups, in both left-hand and right hand-drive versions, for sale domestically as well as across Africa and to the Middle East and Russia.

“Our primary focus is to produce for export,” Whitfield said. “And obviously the No. 1 choice for us is Africa.”

The plant produced 51,000 vehicles last year, about one-third of capacity, with one shift of workers. Yokohama-based Nissan is considering how to add carmaking at the Pretoria site, though it has no plan for a physical expansion because it already can build more vehicles, he said.

“There is a lack of skills” to expand manufacturing at the factory, Whitfield said. “As we move forward to grow competitiveness and to grow production, we are going to be faced with a shortage of skills.”

“The other challenge is stability” in the local labor market amid unrest in other industries, he said. “We need to work together with labor to ensure we can grow both productivity and flexibility.”

To contact the reporters on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net; John Bowker in Johannesburg at jbowker2@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net; Simon Thiel at sthiel1@bloomberg.net

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