Nissan Motor and Korean steelmaker Posco are preparing to process steel sheet products in Japan, the automaker said on Thursday.

The two companies have established a joint venture, POS-YPC, that will process steel in Kawasaki, south of Tokyo, to help ensure a stable supply of steel sheets for Nissan, the automaker told the Associated Press (AP).

Nissan added that Posco's Japanese unit owns a 70% stake in POS-YPC while the automaker's subsidiary Nissan Trading holds the remainder, according to the news agency.

The Associated Press noted that Nissan was forced to halt some of its domestic production plants in 2004 due to a steel sheet shortage - its major suppliers, Nippon Steel and JFE Holdings had problems keeping up with strong demand because of growing consumption in China.

The move to strengthen ties with Posco, the world's fourth-largest steelmaker, could also help Nissan negotiate prices with Japanese steelmakers because high material prices have hit automakers' profits, AP added.