Nissan Boosting Engine Production

Nissan is boosting engine production at one of its plants in Japan, earmarking an additional 6.4 billion yen ($53.8 million) in investment by the end of next year, the Japanese automaker said Tuesday.

Nissan Motor Co. has been investing aggressively in the engine plant in Yokohama.

Tuesday's investment comes on top of 11 billion yen ($92.4 million) Nissan invested in that plant for the fiscal year that ended in March. Japan's third-biggest automaker is also investing another 15.7 billion yen ($131.9 million) for the current fiscal year through March 2008, said company spokeswoman Yuko Matsuda.

The latest investment, which will span the 2008 calendar year, will boost annual production at the plant by 80,000 by the end of next year to 760,000 engines. That's up 12 percent from Nissan's plan for fiscal 2007 for annual production of 680,000 engines at the plant.

The money will also go toward developing a new engine, improving production quality and working on ecological innovations for Nissan engines, Matsuda said.

The Yokohama plant now produces engines for a variety of cars, including minivans, luxury models and sport utility vehicles.

Japan's top business daily The Nikkei reported Tuesday that Nissan is increasing engine production at a time its overseas car-assembly plants are running at full capacity to meet ballooning demand for subcompacts, including the newly released Versa, in North America and other nations.

Matsuda declined comment on the report.

Nissan, allied with Renault SA of France, is among the Japanese automakers beefing up production recently in Japan, as soaring gas prices make small models, as well as hybrid models, sudden hits with overseas drivers, who had previously tended to favor bigger vehicles.

Nissan's U.S. auto sales rose nearly 8 percent in March, boosted by demand for the Versa, Altima sedan and redesigned Infinity G sedan, from the same period a year ago.