Nissan Motor Co. said Thursday it will increase its annual production capacity of cars in China to as much as 270,000 units in 2004, up from 60,000 at present.

Nissan will promote the project through Dongfeng Motor Co., a joint venture between the Japanese firm and major Chinese automaker DongFeng Motor Corp.

The joint venture, scheduled to start operations July 1, will build a new plant with a production capacity of up to 150,000 vehicles in Huadu, Guangzhou City, next year, said Katsumi Nakamura, senior vice president of Nissan and president of the new firm.

A factory in China that currently assembles 40,000 vehicles annually will be shut down when the new plant begins operations, Nissan officials said.

The joint venture will also improve the production capacity of its Xiangfan plant in Hubei Province, boosting output to 120,000 vehicles in 2004 from 20,000 at present by converting its manufacturing line from trucks to cars, Nakamura said.

"We'd like to differentiate Nissan cars from other carmakers' products by offering unique designs and (after-sales) services," Nakamura said.

The venture will produce six Nissan car models, including the Sunny compact and the Teana luxury vehicles. It has an annual sales target of 550,000 units for 2006, comprising 220,000 cars and 330,000 commercial vehicles.

China sold more than 3 million vehicles in 2002, including about 1 million cars, and is expected to expand the market size to more than 5 million vehicles in 2006, according to Nakamura.