The third biggest automaker of Japan, Nissan Motor Co. has entered into an alliance with NEC Corp. to set up a factory that will make lithium-ion batteries in Japan. These batteries will be used in electric and gasoline-electric hybrid cars. In a joint statement issued recently, these two companies said that they will be investing 12 billion yen or $115 million over the coming three years on their plant in Kanagawa Prefecture under this deal in order to make lighter and more powerful batteries.

 

Nissan Motor Co. and NEC Corp. have further stated that their factory will initially manufacture 13,000 units each year, which will gradually be raised to an annual capacity of 65,000. Nissan is devoting so much attention to this project because it is trying to match up with bigger opponents such as Toyota Motor Corp. and Honda Motor Co. in providing hybrid cars. Of late the demand for fuel efficient cars is escalating due to the steeping costs of fuel prices globally.

 

Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo says Nissan views this project as an important move due to the popularity of hybrid cars amid rising fuel prices. In this joint battery venture Automotive Energy Supply Corp., Nissan will up its stake from 50 per cent to 51 per cent. NEC, on the other hand, will hold a 42 per cent and subsidiary NEC Tokin Corp. will possess the remaining stake. This JV, which was set up in 2007, aims to sell its batteries to other companies.