Nissan to Cut Production Costs by 12% by March 2008
Feb. 20 (Bloomberg) -- Nissan Motor Co., Japan's second- largest carmaker, plans to cut production costs by 12 percent as surging commodity prices threaten to curb earnings.
The company will start making different models on the same production line in Taiwan, Thailand, South Africa and Indonesia, said Executive Vice President Tadao Takahashi in a Feb. 17 interview. The carmaker also plans to use 80 percent of global factory capacity by the year ending March 2008, from 75 percent last fiscal year, to achieve the cost cuts over three years.
``It's extremely important to continue cutting costs,'' Takahashi said. The Tokyo-base maker of Altima sedans already has 18 so-called flexible production lines in Japan, the U.S., Mexico, Europe and China.
Nissan Chief Executive Officer Carlos Ghosn, poised to report a sixth year of record profit for the year ended March 31, needs to hone efficiency to compensate for higher prices for raw materials. He has cut 1 trillion yen ($8.5 billion) in costs since taking the helm at the company in June 2000. The new technology has allowed Nissan to retool its assembly lines to make a new model in one and half months, compared with more than three months in 1999.
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