Nissan, Honda to boost China output capacity

TOKYO (Reuters) - Nissan Motor Co (7201.T) and Honda Motor Co (7267.T) plan to boost production capacity in China to tap brisk demand in the country, which overtook the United States as the world's biggest auto market in first half of this year.

Nissan, Japan's third-largest carmaker and 44 percent owned by France's Renault SA (RENA.PA), said on Tuesday it will boost production at its joint venture Dongfeng Motor Co by about 20 percent to around 560,000 units a year from October.

Shares of Nissan surged 7.7 percent to 547 yen on the news.

Nissan will add 1,200 workers and operate three shifts a day, up from two now, at the venture's main factory in the city of Guangzhou, a Nissan spokesman said. The automaker does not plan to add or upgrade facilities.

The Guangzhou plant will be able to roll out 460,000 units a year, up from 360,000. The automaker does not plan to increase capacity at a separate plant in Hubei province, which can roll out 100,000 vehicles a year, he said.

Honda, Japan's No.2 automaker, said its joint venture Dongfeng Honda Automobile Co will lift annual capacity at a plant in Hubei to 200,000 units by the end of this month from 165,000 units.

That would bring Honda's total production capacity in China to 610,000 units.

The venture will add new equipment to enhance automation at the Hubei plant as well as more workers. The Hubei plant is capable of building 240,000 units, and Honda will consider expanding production to that level if demand warrants it, he said.

Honda's shares gained 1.5 percent to 2,405 yen. The benchmark Nikkei .N225 was up 2.2 percent.

(Reporting by Yumiko Nishitani; Editing by Edwina Gibbs)