Nissan to build 4th China auto plant: Nikkei

TOKYO Fri Apr 13, 2012 2:17am EDT

A Chinese consumer examines a Nissan car at a vehicle shop in Shanghai. REUTERS/Stringer

A Chinese consumer examines a Nissan car at a vehicle shop in Shanghai.

Credit: Reuters/Stringer

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TOKYO (Reuters) - Nissan Motor Co (7201.T) will build its fourth Chinese auto factory in Dalian city through its joint venture with Dongfeng Motor Group Co (0489.HK), the Nikkei business daily said on Friday, marking the carmaker's entry into northeast China.

Japan's No.2 automaker plans to invest 30 billion to 40 billion yen ($371 million to $494 million) in the new plant, which will have an annual capacity of 200,000 vehicles and is scheduled to start production in 2014, the newspaper said citing company sources.

The plant will produce the Murano and X-Trail sport utility vehicles, a category rapidly gaining popularity in China. Nissan also plans to make battery-operated electric vehicles at the plant, the business daily reported.

"We are aware of the speculation surrounding our plan to build another plant in China, but as no decisions have been made to date. We have nothing further to say at this time," a Nissan spokesman said, adding the carmaker's mid-term business plan for China is progressing as planned.

In its mid-term business plan, dubbed Nissan Power 88 and issued last June, Nissan said it would focus on China along with other major emerging markets in Brazil, India and Russia, as well as newly developing ones in Southeast Asia.

Nissan has said previously it wants to build Infiniti luxury vehicles in China to boost sales in the high-tariff market. It has also announced plans to assemble electric vehicles in China under the joint venture Venucia brand.

Local production, which can guarantee steady supply and cut costs, has been seen as essential for foreign automakers to expand their footprint in the world's biggest auto market.

Shares of Nissan rose 1.1 percent by the mid-day break, in line with a 1.3 percent rise in the benchmark Nikkei 225 average .N225.

($1 = 80.9000 Japanese yen)

(Reporting by James Topham in Tokyo, Sunayan Bhattacharjee in Bangalore; Editing by Roshni Menon and Matt Driskill)

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