Isuzu Motors has agreed to start producing large trucks in China from 2004 with China's top vehicle maker, Shanghai Automotive, Reuters reported, citing the Mainichi Shimbun newspaper.

Isuzu, due to receive financial aid from its top shareholder, General Motors, will set up a joint venture with the unit of Shanghai Automotive Industry Reuters said, citing the Saturday report in the newspaper.

GM already has a joint venture with Shanghai Auto making saloons and minivans and will consider taking a stake in Isuzu's Chinese venture, the report said, according to Reuters.

Isuzu, embattled by an overcrowded home market and eager to test the potentially huge Chinese vehicle market, has already struck a partnership with Qingling Motors, China's biggest light truck maker, which has a market share of about 20%, Reuters said.

According to Reuters, the newspaper said that Isuzu plans to raise production in China to an annual 70,000 units by 2005 with the latest deal with Shanghai Auto, from 40,000 mid-sized trucks currently made with Isuzu's two other Chinese partners.

The initial plan is to crank out about 10,000 units of 10-ton-size trucks a year using Shanghai Auto's facilities, the paper said, according to Reuters.