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Nissan Revs Up Production in Africa

Nissan Revs Up Production in Africa

By CultureBanx Team

  • Nissan opening up a new $160M car plant in Algeria

  • In 2014, Africa had 35 vehicles per thousand people

Nissan (7201.T +0.09%) is ramping up its investment in Africa with a new $160 million plant. As part of its commitment to the continent and its 2022 midterm plan, they are now focused on Algeria for a new car assembly facility.

Nissan Kenya.jpg

Why This Matters: The Japanese automaker signed a joint venture agreement with Groupe Hasnaoui, a private partner in Algeria to build 63,500 passenger cars and light commercial vehicles annually at the plant. With the new Algerian plant Nissan’s total potential capacity in Africa will increase to about 200,000 vehicles. Additionally, Nissan has invested at least $100 million in a light pick-up truck assembly plant in Kenya.

Nissan sales in Africa increased 11.7% in Q3 of 2018, totalling 70,000 unit

As disposable incomes rise across Africa, consumers want more vehicles and automakers like Nissan, Volkswagen AG (VOW.DE +1.29%), and Peugeot SA (PEU.F -0.54%) are preparing themselves for this increased demand. Nissan sales in Africa increased 11.7% in Q3 of 2018, totalling 70,000 units. In the same quarter, the company’s North America sales decreased 1.4% to more than 1.5 million units.

While demand for vehicles grow in African markets, albeit from a low starting point, the opposite is taking place in North America as the sharing economy takes hold. In 2014, Africa had 35 vehicles per thousand people, an increase from 23 in 2004. In North America, this figure is on a downward trend with 816 vehicles per thousand people in 2014, a decrease from nearly 830 in 2004.

Situational Awareness: As nations are working to wean themselves off their dependence on natural resources, governments are eagerly partnering with these automakers to help build modern industries. Production for the new Nissan plant is slated to start early next year and is expected to create 1800 jobs.

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