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Rays of recovery - Nissan Motor sales in China to beat forecast

It is reported that Nissan Motor Co Japan third largest carmaker sales in China this year will beat its previous forecast as government stimulus measures spur demand. Nissan Motor Co said the company raised its full year sales target in China by 100,000 vehicles to 670,000.

Mr Takashi Nishibayashi head of Nissan China department said the government stimulus programs mainly set to expire at the end of the year have been the tailwind for us. He said that we are hoping that some sort of assistance to the auto industry continues.”

Mr Yuuki Sakurai CEO of Fukoku Capital Management Inc which manages about 800 billion yen in assets in Tokyo said “Nissan is doing well at the moment, but the question is whether this is sustainable after the stimulus program ends. Also, the profitability of small cars is slim.” The carmaker rose 2.6% to 593 yen at the close of Tokyo trading, the biggest gain in a month. Toyota Motor Corp, Japan biggest automaker fell 1% and Honda Motor Co the second largest rose 0.5%. Nissan sales in China rose 32% to 466,219 vehicles in January to August making it the company second biggest market after the US. The carmaker plans to increase output at one of its Chinese plants next month.

Ms Akihiro Nakanishi company spokesman said China has halved the tax on vehicles with engines of 1.6 liters or smaller and given subsidies in rural areas to shield automakers against the global recession. Models accounting for 63% of Nissan China sales including Tiida compacts and Livina minivans qualify for the tax cuts. According to the China Association of Automobile Manufactures, full-year sales of cars, trucks and buses in China may reach 12 million enough to likely surpass the US as the world’s largest auto market. Sales of cars, trucks and buses rose 6.7% in 2008 to 9.38 million.

Nissan plans to increase annual output to 460,000 vehicles at its plant in Guangzhou from 360,000 units by adding a third shift starting in October. The company and partner Dongfeng Motor Group Co. will also add a new line to increase production to 600,000 at the plant by 2012. Nissan will start selling its first electric vehicle, the Leaf, in Japan, the US and Europe next year and in China from 2011. The company plans to initially export the battery powered car to China from Japan and eventually make it in China.

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