TM Toyota Motor Corporation

Japan’s third largest automaker Nissan Motor Co. (NSANY) seems to consider the U.S. market a safe haven when its alliance partner, Renault, is significantly exposed to the Eurozone crisis due to its strong position in France.

Both Nissan and Renault plan to boost their allied company’s production capacity in the U.S. as both of its car manufacturing plants in Smyrna, Tennessee and Canton, Mississippi, are expected to run at full capacity by early 2013.

At the same time, the alliance is cutting back inventory, limiting investment and reducing costs at its European operations as sales in the European car market dipped by more than 1% in 2011 and are expected to deteriorate further by 3% in 2012.

Nissan is performing much better than its Japanese rivals in the U.S. The company showed early recovery from the disruptions in parts supply emanating from the twin disasters in Japan and severe floods in Thailand compared with Toyota Motor Corp. (TM) and Honda Motor Co. (HMC).

Last month, the company’s U.S. sales increased 8% to 100,927 vehicles, driven by a 10.7% rise in Nissan brand vehicles. For the full year, its sales appreciated 15% to 1.04 million vehicles.

Nissan expected to benefit further from improving sales trends in the U.S., driven by strong pent-up demand and low interest rates. Last year, sales in the U.S. rose 10% to 12.8 million vehicles, the highest achieved since 2008 when the financial crisis came knocking.

Recently, Nissan entered a joint venture with Daimler’s (DDAIF) Mercedes Benz division to manufacture engines at the former’s engine-assembly plant in Decherd, Tennessee. The plant will produce four-cylinder gasoline engines for new Mercedes and Infiniti compact sedans that will be manufactured in North America beginning 2014. Nissan also plans to build a new plant in Mexico and expand further in the U.S.

The Zacks#1 Rank (Strong Buy) company posted a 12% fall in profit to ¥183.4 billion ($2.3 billion) in the first half of fiscal 2012 due to a strong yen that more than offset the positive impact from its recovery from the disasters in Japan in March. Sales inched up marginally by 1.1% to ¥4.367 trillion ($54.73 billion) during the period.

During the second quarter ended September 30, 2011, the company’s profit ebbed 3% to ¥98.4 billion ($1.2 billion) from ¥101.7 billion in the same period a year ago.

Despite the disappointing results, the automaker lifted its annual forecast of profit to ¥290 billion from the previous outlook of ¥270 billion.

 
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