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Nissan plans to move compact plants overseas

NISSAN Motor Co will shift production of its top-selling compact car to India, Thailand and other nations, the company said yesterday.

The Nissan March model, and its counterpart Micra model for French alliance partner Renault SA, are now produced in Japan and Great Britain.

Starting in 2010, the model will be produced in India, Thailand and three other nations, company spokeswoman Kana Minamidate said.

But Nissan has not announced that production of the March will end in Japan, she said, declining to comment on a report yesterday in Japan's top business daily The Nikkei that said all domestic March production would be moved to Thailand.

Japan's third-largest car maker now produces 47,000 March compact cars a year at its Oppama plant near Tokyo for domestic sale.

Moving production of the compact model to Thailand would take advantage of the surging yen and cut production costs by about 30 percent, the newspaper said.

If that happens, it would mark the first time Nissan -- or any major Japanese car maker -- has moved domestic production of a best-selling model overseas.

The dollar's plunge to 13-year lows -- at below 90 yen lately -- has fueled speculation that Japanese car makers may move production overseas to take advantage of it.

Devastating dollar

The weak dollar has so far proved devastating for the Japanese car makers by diminishing the value of overseas sales when converted into yen.

The United States financial crisis, which has squelched car demand by about a third in the key US market, is also hurting Japanese car makers.

On Thursday, Nissan said that it was slashing domestic production by 64,000 vehicles in February and March to trim inventories and adjust to a drastic slide in global auto demand.

That comes on top of earlier production cuts, which now total 225,000 vehicles. Nissan had initially expected to produce 1.38 million vehicles in Japan for the fiscal year.


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