Nissan Motor Co. (Tokyo: 7201) is expected to build a 5 billion yuan ($785 million) factory in the northeastern Chinese city of Dalian, an aggressive move into territory traditionally under the sway of Volkswagen AG (Frankfurt: VOW) and Toyota Motor Corp. (NYSE: TM), according to the Japan Daily Press on Friday.

In years past, automakers have divided China into five separate regions, but that segregation is beginning to break down as companies enter each other's territories in search of more localized production, according to the Japan Daily Press. The new factory will allow Nissan to compete more directly with both Toyota and Volkswagen.

The new factory is part of Yokohama-based Nissan's previously announced 30 billion yuan expansion in China where it is hoping to make gains against General Motors Co. (NYSE: GM) in the world's largest automotive market, according to Reuters.