Denso Corporation on Friday said it would increase its annual production of car air conditioners by 20% from the current level to three million units in the US in the fiscal year to the end of March 2006, Dow Jones Business News reported.

The report said the move is aimed at meeting increasing demand from Japanese car makers operating in the US such as Toyota and Honda, as well as from General Motors.

Dow Jones said Denso expects sales of car air conditioners and related products in North America to rise 25% to Y200 billion in the fiscal year ending March 2006 from Y160 billion posted last fiscal year.

In order to boost output, Dow Jones added, Denso subsidiary Denso Manufacturing Michigan will install four new air conditioner production lines at its factory at a cost of slightly more than Y1 billion. The subsidiary will also expand output of component parts for air conditioners and increase such supplies to other car air conditioner makers, the report added.

Dow Jones noted that, in July, Denso set up Denso Manufacturing Arkansas and said it plans to spend Y4 billion to establish a new factory at the subsidiary. This plant will begin producing car air conditioners in January 2005 following output of radiators for use in construction machinery in October 2004, the report said.