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All Down the Line

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Aug. 28 – St. Petersburg – Five years ago the tract of land where Nissan’s St. Petersburg Plant now sits was an open lot as the carmaker broke ground with a bet that the world’s No. 9 economy was due for upturn.

Launching production in 2009 under Managing Director Dmitry Mikhailov, the plant became a cornerstone in the production and sales growth that has made Russia Nissan’s biggest European market.

The factory chief took a walk down the memory line this week with the Global Media Center, also detailing what’s coming for a plant already producing a third of Nissan’s cars in Russia.

Dmitry Mikhailov:

We’ve been in production for three years. I started here during the construction phase. Nissan made a great development over the last five years in Russia.

We started the factory and launched three shifts and three models. Currently, you can see models that we are producing on the line; we started with Nissan Teana,  after that we launched X-Trail, and after that Murano. All three models are quite famous and popular in Russia; X-Trail is our biggest model in terms of numbers, and in particular very popular with Russian customers.

We are planning to expand the plant. The company took the decision several months ago to expand capacity from the current 50,000 vehicles per year to 100,000 vehicles in two years, and we are moving from currently producing three models to five models in the future. This is a dramatic change for Russian operations because we are going to produce more models, which are considered by Nissan to be core models for the brand.

With five models in just two years, we are going to be a major player in the market and are going to increase our market share in Russia, and particularly in St. Petersburg. We are going to increase headcount to twice (current levels), from 2,000 people to 4,000 in the future.

Also, we are introducing new technological steps. Currently, we are producing models in the normal production assembly process – body assembly, the painting process and final assembly. We are going to introduce press operations -  to stamp body parts locally. This is a very good and important step for the localization process because it’s going to be higher Russian content in the territory of the plant.

We are introducing plastics parts, actually a big cost from a logistics point of view when you consider delivering those parts from Japan. They’re going to be produced locally and is another step towards big localization.

Global Media Center:

What changes do you expect for the factory in five years?

Mikhailov:

First of all, for us it is just to become more mature. We are three years in operations,  but realistically we are just a young member of the Nissan family. We just started our operations, trained our people, and our people are obtaining more experience in the production process and problem-solving.

In five years I expect we will step forward in terms of making our people more mature, so our people will understand manufacturing more deeply. Definitely three years in this role is not long enough to become the expert, so we expect that our people in five years will reach a certain level comparable to experience at plants such as in Kyushu or in the U.K. In this case, our plant should be much more stable in production efficiencies, in quality levels, and the satisfaction of the customer is going to be better.

We are going to grow. More people will be joining our plant in St. Petersburg, from the St. Petersburg area, and we are going to educate and train them. This means that we are going to accept 2,000 new people in our company; we are going to send them abroad, train them in the U.K. and Japan, so this means a lot of activities over the next five years.

Localization is dramatic and critical for Nissan’s operations in Russia, and I would say that the next five years will be very active for our company in providing a high percentage of local content, compared with the past, from companies established in Russia. Localization is not easy, as Russian companies do not have experience, but we would like to have more Russian companies producing components.

Cars, Europe, Management, Product Launch, Production, Russia, Suppliers

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