The three shareholders of Zhengzhou Nissan Automobile are boosting its registered capital to CNY1.29bn from the current CNY250m.
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Dongfeng Auto, which made the announcement, holds a 51% stake in the automaker, news agency XFN-Asia said. Dongfeng Auto’s parent Dongfeng Motor Co Ltd, a 50-50 joint venture between state-owned Dongfeng Motor Corp and Nissan Motor, holds 28.65% and Nissan (China) Investment holds the remaining 20.35% stake.
In a statement filed with the Shanghai Stock Exchange, the company said all the three shareholders will retain their shareholding levels after the capital injection.
The report said Zhengzhou Nissan said it must meet a deficit in vehicle production capacity in 2009 amid strong demand market and intense competition. The venture needs to build a new plant to increase capacity and make products tailored for China.
In 2007, the venture sold 40,038 vehicles for a profit of CNY219m.
The new auto plant is expected to have annual capacity of 200,000 passenger vehicles in 2015.
Investment in the plant is expected to reach CNY3.076bn. The first phase, involving investment of CNY985m, is due to be completed next year, the company said.
In a separate statement, Dongfeng Auto said that its board has approved the establishment of an engine joint venture with Dongfeng Motor, XFN Asia added.
The engine venture will have registered capital of CNY720m with Dongfeng Auto holding a 51% stake. Total investment in the project will be CNY1.524bn.
The engine venture will mainly produce light engines which can meet Euro III and Euro IV emission standards and is due to begin operations in March 2009.
