Nissan to invest Y100 bln in China venture

TOKYO, Sept 12 Reuters reported that Nissan Motor Co Ltd plans to invest about 100 billion yen ($831 million) over the next three years in a Chinese joint venture with the Dongfeng Group, the Asahi Shimbun said. The Japanese newspaper reported on Thursday that the long-discussed alliance, which is expected to be announced sometime this autumn, will begin production of regular passenger cars and compact vehicles in China next year.

China's second-biggest auto group and Nissan plan to invest a total of 43 billion yen initially to set up the new company, and they intend to boost investment as they expand production capability, the Asahi said.

"We are still in negotiations, and nothing has been finalised regarding the amount of the investment or when production will begin," said Yoshie Yamazaki, a Nissan spokeswoman.

Nissan and Dongfeng have been in talks to finalize a production deal in China, but the Japanese automaker is watching domestic rivals beat it into the rapidly growing Chinese market.

Toyota Motor Corp announced a broad agreement with China's largest automaker, First Automotive Works (FAW), last month to collaborate on the production of luxury vehicles, minivehicles and sports utility vehicles in China.

Honda Motor Co Ltd already builds 55,000 units a year in China in a partnership with Guangzhou Automobile Group, owned by Hong Kong-listed Denway Motors Ltd

The Nissan-Dongfeng joint venture is expected to produce about 100,000 cars in the first year, including the Cefiro, Sunny and March models, and it plans to boost production in subsequent years, the paper said.

Nissan already has a 30 percent stake in a Chinese light truck joint venture with Dongfeng.