Tuesday, January 25, 2011

YOKOSUKA, Japan (AP) -- The Leaf electric car is rolling down the bustling assembly line at Nissan's Oppama plant, taking the place of a gasoline engine compact whose production was moved abroad last year.

The Oppama plant in the Tokyo suburb of Yokosuka is a showcase for Nissan Motor Co.'s ambitions to be a leader in green auto technology. And the plant, shown to reporters Tuesday, is good publicity for the company amid recent moves by Japanese automakers including Nissan to send production and jobs overseas.

The Leaf, which started being delivered in late 2010, replaces the March subcompact whose production was moved to Thailand last year - the first case of a mass-selling model from a major Japanese automaker being produced overseas and then being imported back for sale in Japan.

In the same way that Detroit has lost auto jobs in the last few decades, moving production abroad is a growing shift among Japanese automakers. They have felt more urgency to cut costs lately because of the surging yen, which makes Japan's exports more expensive overseas.

But Nissan Chief Operating Officer Toshiyuki Shiga says it's important to keep auto production in Japan, even though it's easier to make short-term profits with overseas production.

He points out the Leaf, which sells for under 3 million yen ($36,000) with government subsidies in Japan, is worth about three times the March, ensuring more value for Japanese production.

The Leaf's suggested retail price including destination charge in the U.S. is $33,600. Some states offer incentives and rebates for the electric car, and a taxpayer can claim a $7,500 federal tax credit for purchasing a Leaf in the U.S.

"We cannot allow Japan's manufacturing prowess to be rotted away, just because of the high yen," Shiga told reporters earlier this week.

Models packed with new technology like the Leaf could be the answer.

The Oppama plant was still adjusting to producing the Leaf, which doesn't have a gasoline engine but needs different parts like a special battery and an electric motor.

The factory, which employs 1,860 workers and has added 225 temporary workers, is now making about 2,000 Leaf cars a month.

But Nissan is making efforts to boost that to more than 4,000 to reach 50,000 annual production at Oppama sometime this year, although Senior Vice President Toshiharu Sakai declined to say exactly when.

Sakai and other Nissan officials said special care was being taken with Leaf production, much of it untested territory, such as checking the electrical parts.

The Leaf gets assembled on the same line that also makes three other compact models - all regular gasoline engine cars.

The line is rather hectic because workers must put in a motor when the Leaf rolls by, but install an engine for the other models.

Right now, only every car in about six or seven is a Leaf.

The same careful Leaf production will be adopted at overseas plants set to manufacture the Leaf next year - the Smyrna plant in the U.S. and the Sunderland plant in Great Britain - with the goal of making 250,000 electric vehicles a year globally by 2015, according to Nissan.

"Making EVs is a new experience for us so we are being very careful," said Oppama Plant Vice President Seiji Honda.

There have been 6,000 orders in Japan for the Leaf, and 20,000 in the U.S. It arrives in Europe later this year. Only a handful of customers anywhere have gotten one so far.

Still, the success of the Leaf is winning over some initial skeptics, who had pointed out that an electric vehicle needs rechargers on roads, and would otherwise run out of juice.

Nissan has used the Leaf to send its messages of corporate responsibility. It has been aggressive in forging deals with governments around the world, such as Portugal and the U.S. state of California, not just Japan, to push electric vehicles.

Mamoru Katou, an auto analyst with Tokai Tokyo Research and a former skeptic, acknowledged he was impressed.

"Of course, the Leaf is not going to sell in big numbers in the beginning," he said in a telephone interview. "But Nissan has demonstrated it is a pioneer. And so the Leaf is already doing wonders for the Nissan brand."


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