How $1 billion investment could yield `all-American' Japanese car

Despite declining sales, Japan's second-largest carmaker is demonstrating its commitment to the US market with a series of investments that could eventually total more than $1 billion. The reorganization of the company's research-and-development operations will quadruple its American-based design and engineering staff. Meanwhile, the company is expected to announce later this year plans to expand its only US assembly plant, and to add a new engine and transmission facility.

``To understand the taste of American consumers, we must be here and work in this market,'' says Takeshi Tanuma, the newly appointed president of Nissan Research & Development Inc., headquartered in Ann Arbor, Mich.

``I believe we have pretty good customer satisfaction,'' Mr. Tanuma said when asked about the company's declining sales, ``but we definitely have to improve it.''

Nissan Research will design products primarily for the US market, to be manufactured at the assembly plant operated by Nissan Motor Manufacturing in USA in Smyrna, Tenn.

As a result, Tanuma says, ``maybe within a few years, we are going to have to increase the capacity of Smyrna substantially.''

The first Nissan Research product is expected to debut in the 1992 model year, and Tanuma says that still-unspecified passenger car should be the first vehicle Nissan exports from ``from here to Tokyo,'' and possibly Europe. Eventually, Tanuma says, ``if we could export more than two or three car lines, it is ideal.''

A decision on expanding the Smyrna plant will be made by the end of the year.

At the same time, Tanuma indicates Nissan should announce plans to build a new engine and transmission plant in North America. He says the company has not decided whether to build the facility in the US, Canada, or Mexico.

By producing power trains in the US, Nissan would move much closer to its near-term goal of sourcing 75 percent of the components used at the Smyrna plant from American suppliers, or from its own US factories. That goal should be reached by the end of the decade.

The ultimate goal of company executives, Tanuma said, is 100 percent domestic content, ``but that is probably impossible.

``Maybe 95 percent is the real target,'' which he hopes to reach ``as soon as possible.''

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