Nikkei reports that Nissan intends to raise production capacity for subcompact engines at its main engine plant in Yokohama to 760,000 units a year in the year to March 2009, up 12% from plans for the current fiscal year.

Investment on the upgrade of subcompact car engine is expected to reach 6.4 bn yen, the business daily said.

The automaker has decided to increase supply of its engines as its overseas assembly plants continue to work at full clip to cope with rising subcompacts demand in North America and elsewhere, according to Nikkei.