Japan’s Nissan Motor Co. said Tuesday its joint venture with China’s Dongfeng Automotive Investment Co., Dongfeng Motor Co., would begin construction of a 3-billion-yuan (US$360 million) engine plant in Guangzhou.

The new plant would start producing Nissan’s new global generation of environment-friendly engines in early 2006 for supply to Dongfeng Motor’s passenger car plants in China, Nissan said.

Its production capacity is expected to reach more than 360,000 units by 2008, with a workforce of 1,500 people.

The plant, to be built on a 390,000-sqm site in Huadu District, would have casting, machining and assembly shops, Nissan said.

Dongfeng Motor launched two car assembly plants this year, including a facility in Huadu to assemble the Nissan Sunny and Bluebird cars and another in Xiangfan in the central province of Hubei to manufacture the Teana cars.

Guangzhou, China’s third-largest car production center behind Shanghai and Jilin Province, is expected to produce 1.3 million automobiles worth an estimated 300 billion yuan by 2010.

The city’s automobile industry was projected to gross 46.627 billion yuan in sales, up 69.3 percent from a year earlier, Lin Yuanhe, executive vice mayor of Guangzhou, said earlier this month.

Lin estimated the city’s car output could reach 400,000 units this year and rise to 800,000 units in the next two to three years.

The automobile industry would become one of Guangzhou’s pillar industries to maintain its double-digit economic growth, Lin said.

Guangzhou is virtually encircled with car plants. Nissan’s joint venture started operations this year on the northern outskirts. Honda Motor Co. makes its popular Accord sedans and Odyssey minivans in a joint venture with Guangzhou Automobile Industry Group on the eastern outskirts, while Toyota Motor Corp. has unveiled plans to build Camry sedans in partnership with the same Chinese company in the south.

Industry sources have said the city is negotiating with France-based Renault for a possible joint venture.

The city had also attracted more than 200 car parts manufacturers, Lin said.

(Shenzhen Daily December 22, 2004)