Dongfeng Nissan, a joint venture between Japan's Nissan Motor and China's Dongfeng Motor Group, will expand a passenger car plant in Guangzhou to accommodate growing demand for its vehicles. The partners will invest a total of CNY5bn ($732USmn) to expand the Guangzhou-based plant's annual production capacity from 240,000 to 700,000 units by 2012.

Based on its sales so far, Dongfeng Nissan is in a position to surpass its sales target for 2009 ahead of schedule. The company sold 225,073 units in H109, up 41% year-on-year (y-o-y). The full-year target is 388,000 units, which would be an 11% increase from the 350,000 units sold in 2008 if achieved. Nissan's total sales in China, including its premium Infiniti brand and other businesses, rose 19% in H109 to 332,181 units to make China the company's second largest market after the US. The performance was even better than Nissan's sales in Japan, which fell 25% in H109 to 292,020 units.

For Dongfeng, the expansion news will be a positive development after discovering that its other joint venture, with France's PSA Peugeot Citroën, will not be going ahead with a project to build a third plant. The automaker will suspend work on the facility in Wuhan, as the joint venture's two existing plants are not operating at their full capacity. The PSA group began the third plant project in September 2007 as part of its long term plans for 2010-2015, which includes the goal of selling one million cars per year in China by 2015. The company was aiming to increase its local capacity to 400,000 units by 2009 and further to 600,000 units by 2012 before the project was put on hold.

Nissan also has far-reaching plans for China, however, and aims to launch 15 new models in the country by 2012. Senior Vice President Andy Palmer has stated that the new models include 10 passenger cars and five light commercial vehicles. Nissan also has an agreement to support the Chinese government in its strategy to boost the development and use of electric cars, which has prompted the company to bring forward its launch of its electric vehicles in the country to 2011.

The carmaker expects its total group sales to rise by 4.6% to 570,000 units in 2009. It is clearly optimistic for the Chinese market, which BMI expects to grow by an average of 8% over the next three years. In 2008, China accounted for around 15% of the company's global sales.