TOKYO -- The head of Nissan Motor's main China joint venture said on Wednesday the firm aimed to boost sales by 25 percent in 2005 despite intensifying competition caused by price cuts and a slowdown in the local car market.
Katsumi Nakamura, president and CEO of Dongfeng Motor Co., a 50-50 joint venture between Nissan and China's Dongfeng Motor Corp., said the revenue rise to 55 billion yuan ($6.65 billion) would be driven partly by a more than doubling in passenger vehicle sales to 140,000 units in 2005.
"We're targeting 140,000 units this year with two new models, and are sticking to our original goal of selling 300,000 Nissan-brand cars in China by 2007," Nakamura told reporters.
"But with the price cuts and more launches of new models (by rivals) the competitive environment is severe," he added.
Last year, Japan's second-biggest automaker sold less than 61,000 passenger vehicles in China, short of an original target of 80,000 as the Chinese government tightened credit to tame an overheating economy and competition intensified.
Dongfeng Motor Co. sells passenger cars under the Nissan brand and commercial vehicles under Dongfeng's.
Nakamura stopped short of giving a profit estimate citing uncertainty in the direction of raw materials prices.
Last year, Dongfeng Motor Co. posted an operating profit of 2.5 billion yuan, yielding a profit margin of 5.7 percent.
China, once an easy profit center providing global car makers double-digit margins, has become one of the industry's most intense battlegrounds as virtually every major car brand competes for a bigger slice of the still fast-growing market.
After doubling in 2003, sales of passenger cars grew 15 percent last year.
Nakamura said he expected a similar pace of growth in 2005, with pressure on prices remaining, led by General Motors, Volkswagen and Hyundai Motor Co.
Late last year Nissan added the high-end Teana sedan to its passenger car lineup consisting of the Sunny and Bluebird sedans. The automaker is due to announce another new model in China this week.