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June 12, 2003

JAPAN: Nissan plans to boost China car production more than four-fold in a year – report

Nissan expects to sharply raise annual passenger car production capacity at its joint venture in China to 270,000 units in 2004 from 60,000 currently, senior vice president Katsumi Nakamura said on Thursday, according to Dow Jones.

By bcusack

Nissan expects to sharply raise annual passenger car production capacity at its joint venture in China to 270,000 units in 2004 from 60,000 currently, senior vice president Katsumi Nakamura said on Thursday, according to Dow Jones.

The news agency said the increase is part of Nissan’s strategy in the fast-growing Chinese market to sell 220,000 passenger cars by 2006 through a 50-50 joint venture with partner Dongfeng Motor Corp.

Dow Jones noted that Nissan, which is 44.4%-owned by Renault SA , said earlier this week it and the Chinese car maker will start operations of the joint venture in July whose capital of 16.7 billion yuan is the largest single foreign direct investment in China’s motor industry.

Currently Nissan makes its Bluebird passenger car at two plants owned by a Dongfeng subsidiary which will become a subsidiary of the joint venture, the report added.

Capacity at the plant in the southern city of Guangzhou, capital of Guangdong province, will increase to 150,000 from the current 40,000, Dow Jones said, while the other plant, in Xiangfan, Hubei province, will raise annual capacity for Nissan passenger car production to 120,000 from 20,000 units.

The venture plans to produce six Nissan-brand passenger car models in China by 2006, including the Sunny compact car and Teana luxury sedan, Dow Jones noted.

Nakamura reportedly said he expects car demand in China to grow to five million vehicles in 2006, up more than 60% from three million units in 2002.

The venture will produce Nissan-brand passenger cars and trucks, mainly Dongfeng-brand trucks, and is targeting sales of 550,000 vehicles, including 220,000 passenger cars and 330,000 commercial vehicles, by 2006, Dow Jones said.

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