China's Dongfeng Motor Group said its joint venture with Nissan Motor would spend 5 billion yuan ($732 million) to expand a new passenger vehicle plant in China's southern city of Guangzhou.
The new plant with a maximum capacity of 240,000 vehicles a year will start operations in 2012, it said in a statement on Tuesday.
The capacity of Dongfeng Nissan, a unit of the Chinese joint venture Dongfeng Motor Co Ltd, will be expanded by more than half to 700,000 vehicles.
Dongfeng said the expansion will safeguard the mid to long term business plan of its joint venture.
In the first half of 2009 Dongfeng Nissan sold 225,073 vehicles, up 41 percent from the same period last year and is likely to meet the annual sales target of 388,000 in advance, the company said.
It sold 350,000 vehicles in 2008, up 29 percent from the previous year.
Formed in 2003, Dongfeng Motor Co is the first joint venture in China to offer a whole range of products from trucks, buses and light commercial vehicles to passenger vehicles.
(Reporting by Alison Leung; Editing by Greg Mahlich)