Nissan Bets On N. American Commercial Van Market

Betting millions of dollars and five years of research, Nissan hopes commercial van market in North America will finally let Mississippi plant live up to full production potential.

CANTON, Miss (AP) -- Nissan is betting millions of dollars and five years of research that the commercial van market in North America will finally let its Madison County auto manufacturing plant live up to its full production potential.

The company halted production of the Quest minivan this year, reassigned 600 workers from other areas of the plant and just completed an $118 million expansion and modification of the facility to accommodate the new vans, which should be in production by the fall. Test trials on the new vans could begin within weeks.

"We see a real opportunity to expand on business in the United States with commercial vans," said Dan Bednarzyk, Nissan vice president of manufacturing for Canton.

Based on early feedback from dealers, Nissan expects the commercial van will be well-received, Bednarzyk said.

The vans, which were introduced last month at the National Truck Equipment Association's annual Work Truck Show in St. Louis, are new products for North America. Nissan produces commercial vehicles in other countries, but until now resisted entering the market here.

Pricing on the vehicles has not yet been announced.

Commercial vans are a relatively small market. Nissan says it makes up about 16 percent of its global sales.

The main buyers are companies like FedEx, which have fleets of such vans, and small businesses like landscapers or repair technicians.

Most industry watchers consider the segment is underserved -- Nissan's main competitors will be the Ford E-series, Chevrolet Express and Mercedes-Benz Sprinter -- but it is also a tough market to crack, said James Hossack, vice president of the automotive research firm AutoPacific.

However, Nissan already has some strong commercial van products in Japan and Europe and this is a natural extension of that market, Hossack said.

Like the market for passenger cars, commercial vehicle sales have been hit hard by the downturn in the economy. U.S. sales of commercial vehicles have dropped for three consecutive years. Industry analysts say sales appear to be on an upswing in 2010, and anticipate that growth to continue over the next several years.

Nissan says the commercial vans, which will be known as the NV line, are the most researched vehicles the company has ever produced. They include a cargo space large enough to hold an Altima and a main cabin set up for comfort and ease of use. The interior will feel more like a pickup truck than a traditional commercial van, Bednarzyk said.

The Canton plant was chosen to produce the vans because it had plenty of space and the facility was already producing large vehicles. The plant currently produces the Altima, Armada, Titan, under the Nissan nameplate and the Infiniti QX56.

Most of the new investment was made in the paint plant, where 60,000 square feet were modified and 49,000 square feet added to accommodate the van. The vans range in height from 84 to 105 inches and are 240 inches long and 80 feet inches wide -- and will require 10 gallons of paint each, according to JD Delancey, paint manager for the commercial vans.

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