Nissan Motor Co. and DongFeng Motor Corp. said Monday they have established a 50-50 auto manufacturing joint venture in Wuhan, Hubei Province.
The new entity, Dongfeng Motor Co., is the first joint auto venture by Chinese and foreign firms in China with product lines ranging from trucks, buses and light commercial vehicles to cars, the companies said.
Capitalization is about 240 billion yen.
The venture will start production of Sunny models this month and Teana luxury sedans next year, with annual sales targeted at 550,000 units in 2006 with a lineup of six car models, the two companies said.
Nissan will make a capital contribution of about 120 billion yen in cash, one of the biggest Japanese corporate investments in China, and DongFeng will provide the same amount in existing assets, including equity in relevant subsidiaries and affiliates, they said.
Nissan, which had fallen behind other automakers in entering the Chinese market, apparently wants to catch up with rivals through the establishment of the joint venture.
The joint venture will have 74,000 employees.
DongFeng President Wei Miao has been named chairman of the joint venture and Nissan Senior Vice President Katsumi Nakamura has been named president.
Nissan said it plans to invest another 20 billion yen to 30 billion yen by 2006 for product development.
