Nissan mulls acquiring Ssangyong to boost capacity in S. Korea: Ghosn

YOKOHAMA, June 23 Kyodo -
Nissan Motor Co. and its partner Renault SA of France are discussing the
prospect of acquiring South Korean carmaker Ssangyong Motor Co. to expand their
group's production capacity in South Korea, Nissan President Carlos Ghosn said
Wednesday.
''We are in discussions and we will go through an analysis,'' Ghosn told the
press after the company's annual shareholders meeting in Yokohama, southwest of
Tokyo.
''If the cost of this capacity (with Ssangyong) is better than expanding the
plant (operated by Renault in South Korea), we are interested in making a deal
around Ssangyong,'' said Ghosn, who also doubles as the chief executive officer
of Renault.
''We are short of capacity in (South) Korea,'' he said, adding they need to
produce models like the cars produced by Renault Samsung Motors Corp. which are
''competitive'' in the Middle East market.
Shipping cars from Japan ''is not very competitive'' against South Korean
rivals, thus there is a need to build cars in South Korea, Ghosn said, alluding
to the difficulty of exporters amid the yen's strength.
According to the South Korean automobile manufacturers association, Renault
Samsung Motors ranked third in South Korea in terms of domestic sales in 2009,
behind Hyundai Motor Co. and Kia Motors Corp.
Ghosn said the choice was either to expand the Renault plant in Busan, South
Korea, or acquire an existing capacity.
The Busan plant produces Renault Samsung cars as well as Nissan cars including
the Sunny sedan for the Middle East, and has an annual production capacity for
300,000 cars.
The Nissan-Renault alliance is expected to be among seven firms, including an
Indian carmaker, interested in having a stake in Ssangyong Motor, with the
bidding set to be held by August, sources familiar with the matter said
earlier.
The bid was submitted in June, and the final decision is likely to come in
several weeks, Nissan officials said but did not elaborate.
The race among the automakers to purchase Ssangyong Motor comes as the company
is seeing sluggish sales amid the global economic slump. Ssangyong Motor filed
for bankruptcy protection in January last year.
The envisioned plan by Nissan and Renault to ally with the South Korean firm
reflects a growing trend by automakers worldwide to realign themselves, which
may involve South Korean and Chinese automakers as the economic downturn has
dented auto demand.
Meanwhile, Ghosn said Nissan has remained unaffected by the recent strikes by
Chinese workers at plants operated by Japanese parts suppliers, saying Nissan's
operations currently are ''running smoothly.''
''We are extremely attentive...and we spend a lot of time watching carefully
what's going on'' in our plants and our suppliers, he said.
Such strikes have affected the local production of Toyota Motor Corp. and Honda
Motor Co.
==Kyodo