Nissan, Dongfeng to build engine plant in China

Japan's Nissan Motor Co. and its Chinese partner Dongfeng Motor Corp. plan to build a new engine factory in central China, a Japanese newspaper reported on Saturday.

The two firms will jointly invest more than 24 billion yen (224 million dollars) in construction of the new plant, which will begin operation in March next year, the Nikkei business daily reported.

The factory will be located near Zhengzhou Nissan Automobile Co., an assembly joint venture between the two automakers in Henan Province, the newspaper said.

It will mainly supply three-liter diesel engines for light commercial vehicles to Zhengzhou Nissan Automobile, it said.

With the supplies from the new plant, Zhengzhou Nissan Automobile will raise its production capacity to more than 120,000 vehicles.

Nissan and Dongfeng are to set up a new joint venture in October to control the plant with an initial capital of 11 billion yen, the daily said.

Dongfeng will control 51 percent of the venture and the 50-50 Dongfeng-Nissan venture taking the remaining 49 percent.

Nissan aims to raise total sales of vehicles made with Dongfeng to one million units by 2012, up 64 percent from the level in 2007 amid strong demand for light commercial vehicles in the country.