Isuzu Motors Ltd. said Wednesday it has started production of large and medium-size buses in China, the first Japanese firm to embark on a venture of this kind.

Guangzhou Isuzu Bus Co., a company jointly established in Guangzhou, southern China, by Isuzu and the Guangzhou Automobile Group, has started producing two types of sightseeing bus.

One of the buses has a seating capacity of 33 while the other has a capacity of 49.

The firm has also started to produce shuttle buses that can seat 43 people, Isuzu said in a news release.

Demand for buses in China is growing along with the construction of highways, and demand for sightseeing buses is expected to be particularly strong in Guangzhou, which is often affected by heavy traffic traveling to and from Hong Kong, the news release said.

The joint company will produce 100 buses in 2001 and aims to raise this annual figure to 1,000 units by 2004.

The local content ratio will be raised to more than 40 percent by September and then to 50 percent by the end of 2002.

Guangzhou Isuzu Bus was set up in February 2000, with Isuzu having a 49 percent share and Guangzhou Automobile a 51 percent stake.

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