Nissan Halts St. Petersburg Production

Nissan will suspend production at its Russian plant in St. Petersburg but not due to economic reasons as many of us might be tempted to believe, the company officials emphasized. Activities will be halted in early August for the summer holiday period, so it is expected to restart operations this autumn.

According to just-auto.com, a Nissan spokesperson underlined that this is not a result of the global recession or the decreasing demand.

Nissan opened the St. Petersburg facility on June 2 and it currently manufactures the Teana model, with X-Trail SUV likely to enter the assembly lines later this year. It employs 750 workers and has an annual capacity of 50,000 cars when operating at full capacity. Nissan started the construction of the plant on June 8, 2007.

The Japanese manufacturer recently announced that some of the engines to be built in the United Kingdom will go to Russia to be fitted on the X-Trail models assembled at St. Petersburg. The news came after the government's development agency One North East approved a 1.94 million pounds funding for Nissan to build 65,000 engines per year in the next four years. This will help the carmaker save approximately 130 jobs at the Sunderland production facility and add an extra 200 workers by 2013.

"The announcement is part of Nissan's ongoing initiative to localise production close to, or within, target markets. This minimises logistics costs and reduces exposure to exchange rates as well as allowing the company to react more quickly to customer demand," the automaker said in a statement quoted by just-auto.com.