Nissan has launched its first locally made sedan for China, starting an ambitious $US1 billion expansion into one of the world's fastest growing and hotly contested markets, Reuters reported.

Nissan's rival, Honda, also unveiled its Fit [Jazz] saloon, aimed at the same lower-income buyers the Nissan Sunny will go after – a market segment analysts say is the most intensely fought-over, Reuters added.

According to the news agency, Nissan, which is sinking $1.03 billion into a venture with local partner Dongfeng Motor Corp, wants to start selling the mid-sized Sunny by June, the company's senior vice president and China chief Katsumi Nakamura told reporters.

Nakamura reportedly said output this year would total 20,000 units and rise to 40,000 next year. The Sunny would also vie with Volkswagen's Bora and Toyota's Corolla if that comes to China, he added.

"We expect to roll out the first Sunny by June this year and it will be priced at about $24,160. The Sunny will help us strengthen our presence in China," he said, according to Reuters. Nissan, 44.4% owned by Renault, has also launched its sporty 350Z roadster in China and is expected to roll out the high-end Cima sedan this year.

Reuters said the once-troubled giant is making up for lost time in China, announcing late last year one of the broadest alliances that international players have yet forged with a local car maker

Nissan intends to work with Dongfeng's production base to crank out 550,000 vehicles by 2006, Reuters said.

The Sunny, a tested product popular in much of Asia [similar to the Sentra sold in other markets], is Nissan's first salvo at China's burgeoning car market, Reuters said. It launched its Paladin SUV in February this year.

A spokesman told Reuters it was still too early to say how many Paladins had been sold, but that Nissan would like to see at least 10,000 units on Chinese roads by the end of 2003.

Nissan is a relative latecomer to a market where car sales jumped 56% to just break the 1 million mark last year, Reuters noted.

Honda, by comparison, has been selling high-end Accords made by its venture in southern China since the late 1990s, Reuters said. The company this week said that it had sold 15,820 vehicles in the first quarter of 2003, up 34%, Reuters added.

The news agency said the venture with Guangzhou Automobile Group -- owned by Denway Motors of Hong Kong -- aims to ramp up capacity to 120,000 units by the end of 2003, selling 110,000 vehicles.

Targeted sales included 20,000 Fit cars, 20,000 Odyssey multipurpose vehicles [minivans] and 70,000 Accords, executives told Reuters.

Asked why Honda decided to get in on the fiercely competitive economy car segment with its Fit, Guangzhou Honda General Manager Koji Kadowaki told the news agency the pie was big enough for all.

"This is still such a rapidly expanding segment, particularly in the 1.0- to 1.5-litre category, so we're just satisfying consumer demand," he said in a news briefing, according to Reuters.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more