TOKYO — Nissan Motor will start producing engines for a luxury crossover SUV in the U.S. to avoid tariffs under a reworked North American trade agreement (USCMA) that requires 75% of a car’s parts to be locally sourced
The Japanese automaker will start producing as early as 2020 the latest engines for the Infiniti QX50 at a Tennessee plant, with output to be shipped to Mexico for final assembly. Initial production is aimed at more than 20,000 units. The engines are currently exported from its Yokohama factory, which will continue production.
The move would make Nissan the first Japanese automaker to adjust output to meet requirements under the new U.S.-Canada-Mexico agreement, slated to take effect as early as January 2020. The pact, born out of the renegotiation of NAFTA in September 2018, requires that a vehicle have at least 75% North American content in value terms, up from the current 62.5%, to avoid tariffs of up to 25%.