Nissan on Tuesday said it would begin local assembly in Vietnam next year after seeing "tremendous opportunities" in Vietnam despite the effects of the financial crisis on the industry elsewhere.

Nissan Vietnam would launch its first model assembled in the country by 2010, the automaker said in a statement cited by news agency AFP.

Vehicles would be built by Vietnam Motors, an existing assembler, under the guidance of Nissan engineers, and distributed by Nissan Vietnam.

"Vietnam is a strategic market for Nissan with tremendous opportunities," Shinya Hannya, Nissan's corporate vice president for Asian markets, said.

"The offering of locally assembled products will accelerate our business in Vietnam and lay the foundation for further growth."

The company did not say which models would be produced initially at the Hanoi factory, or in what quantity.

Nissan Vietnam is a joint venture between Nissan Motor and Denmark's Kjaer Group, an international vehicle distributor.

The company said Nissan Vietnam began operations in December and has begun importing and distributing vehicles, parts and accessories through its dealers.

Nissan vehicles have been sold in Vietnam since 2004 through Kjaer Group and its Vietnamese subsidiary, Motorcare, but market share is only about 1% because of high import duties on automobiles, a company official told AFP.

"This is the reason why Nissan has decided to start local assembly," she said.

Vietnam's market "is actually not shrinking as much as in most other countries" and is expected to be growing again next year when Nissan launches, she added.

Seventeen automotive producers or assemblers already have operations in Vietnam, including Ford, Honda and Toyota.

Their total vehicle sales in May were 8,761, down from 11,494 a year earlier, according to the Vietnam Automobile Manufacturers' Association.

Toyota was among the first automakers to set up a local KD kit assembly plant, after the Vietnamese economy was opened up to foreign firms in the 1990s, and began building the Camry. But the automaker and others who followed have had to deal with frequent changes in government policy concerning taxes and duties payable on imported car kits, components and the finished vehicles which, model for model, are among the most expensive globally and out of the reach of most Vietnamese whose incomes are low by western standards.

Nissan also used the contract CKD assembly and local distributor route to enter a number of relatively small, tariff- and tax-protected new markets around the globe, including Australia and New Zealand, during the Japanese automakers' export drive from the late 1950s to the 1970s.