Nissan, Dongfeng to unveil tie-up Thursday

TOKYO, Sept 18 Reuters is reporting that Japan's third-largest automaker, Nissan Motor Co Ltd , said on Wednesday it would announce a long-discussed alliance with the Dongfeng Group, China's second-biggest auto group, in Beijing on Thursday afternoon.

The comments followed a report in Japanese business daily Nihon Keizai Shimbun that Nissan and Dongfeng would initially invest around 50 billion yen ($409.6 million) to set up a 50-50 joint holding company to make 150,000 passenger cars a year from 2004 in China.

Nissan spokesman Gerry Spahn would not confirm the newspaper report, but said Nissan Chief Executive Carlos Ghosn and Dongfeng executives would give details of the agreement at a joint news conference in Beijing on Thursday afternoon.

The newspaper said the two partners will use Dongfeng's existing manufacturing bases in Guangdong and Hubei provinces, among other locations, to produce Nissan passenger cars such as the Cefiro, Sunny and Bluebird Sylphy.

Nissan, which is aiming to boost its annual global sales to 3.6 million units from the current 2.6 million units in three years, has been watching domestic rivals beat it into the rapidly growing Chinese market.

Japan's largest automaker, 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.

Japan's second-largest automaker, Honda Motor Co Ltd, already builds 55,000 vehicles a year in China in a partnership with Guangzhou Automobile Group, owned by Hong Kong-listed Denway Motors Ltd .

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