Nissan says China sales may reach 500,000 in 2009

Nissan may sell half a million passenger cars in China this year and expects sales to continue growing even after Beijing's tax incentives end, a top executive said on Wednesday.

Kimiyasu Nakamura, president and chief executive of the Japanese automaker's China joint venture, Dongfeng Motor Co., said demand was spurred by strong sales in inland regions, where people are just starting to buy cars.

He expects to clear this year's sales target of 388,000 passenger cars by October, and said the sales tally in China may reach as high as 500,000 vehicles for the year.

'Motorization has just started in China,' he told a small group of reporters at Nissan's Yokohama headquarters, using the term for Japanese snatching up cars during modernization in the 1960s and 1970s.

Chinese customers tend to be first-time car buyers and so by ensuring quality and building the brand's reputation, Nissan Motor Co. hopes they will keep coming back, Nakamura said. Nissan's vehicle sales in China through Dongfeng have been solid despite the slowdown in more mature markets such as North America, Japan and Europe.

Passenger vehicle sales in China for Nissan rose 52 percent for January through August compared to the same period the previous year at more than 320,000 vehicles, offsetting declining truck sales, according to Nakamura.

Although Chinese government tax breaks meant to stimulate car sales apply only to small cars, Nakamura said sales of bigger cars were also up, and his company was rushing to keep up with demand. He said the incentives had helped boost consumer interest in purchasing cars.

Nissan has been putting on small-scale auto shows in inland areas by bringing in big trucks whose rear section opens up to showcase events and demonstrations for potential customers as well as children.

In China's coastal areas and cities, 50 to 150 people may own a car per 1,000 people, but in inland regions the ratio is far lower at about five to 20 people, according to Nissan. In the U.S., about 750 per 1,000 people own cars.

Nissan is hoping to sell 1 million vehicles in China a year by 2012. Last year, after the financial crisis struck, some told Nakamura the target may be too optimistic, but these days, they're telling him the same number may be too cautious, he said.