Nissan - DFM plan to build new engine plant in Central China

GUANGZHOU, China, Jul 14, 2008 - Nissan Motor Co.and Chinese partner Dongfeng Motor Corp. plan to build an engine factory in central China to supply their expanding commercial vehicle operations.

Japanese automaker Nissan expects that strong demand for light commercial vehicles will propel it toward its higher Chinese sales target.

The new plant will cost more than 1.5 billion yuan (US$219.49 million), or about 24 billion yen, and be situated near Zhengzhou Nissan Automobile Co., a Henan Province joint venture between the two automakers. Production is to begin next March.

The plant will be operated as a joint venture to be formed this October with an initial capitalization of 720 million yuan, or roughly 11 billion yen (US$103.46 million), with Dongfeng controlling 51 per cent and a 50-50 Dongfeng-Nissan venture taking the other 49 per cent.

It will mainly supply 3-liter diesel engines for light commercial vehicles to Zhengzhou Nissan Automobile, with an emphasis on fuel efficiency and environmental friendliness. Output at Zhengzhou Nissan Automobile is being stepped up with a second plant that will have a production capacity of more than 120,000 vehicles.

Engines will also be built for a new line of passenger cars to be launched by Dongfeng next year.

Nissan aims to raise total sales of vehicles made with Dongfeng to 1 million by 2012, up 64 per cent from the level in 2007. It is alone among Japanese automakers in placing sales of light commercial vehicles in China at the center of its growth strategy. More than five new models are planned for release in the next five years.

[Souce : Nikkei]