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Japan's Nissan enters China's growing SUV market

SHANGHAI, Feb 19 (Reuters) - Nissan Motor Co Ltd is revving into China's growing market for sport utility vehicles (SUVs) through a joint venture in central Henan province which aims to make 10,000 units in its first year.

Japan's third-largest automaker said on Wednesday its 30 percent-owned venture, Zhengzhou Nissan Automobile Co Ltd, had started producing the Paladin SUV, available in 2.4-litre and 3.3-litre models, on Tuesday.

A company spokesman said the retail price of the SUV would be announced when the first models hit showrooms. He did not specify when this would be.

Zhengzhou Light Automobile Works and China's flagship investment vehicle, CITIC Holdings, both own a 35 percent stake in the tie-up with Nissan, the statement said.

Zhengzhou Nissan also makes the Nissan-branded Pickup and has an annual production capacity of 60,000 units.

Nissan also has a 50-50 venture with Dongfeng Motor Corp, one of China's largest auto groups. That venture aims to roll out 550,000 vehicles by 2006.

Foreign automakers are racing ahead with plans to manufacture sedans in China, eyeing the world's fastest-growing market for cars, but the SUV arena is also filling up.

China-based automakers sold 3.248 million vehicles last year, a 37.1 percent increase over 2001.

The Paladin made its debut in China at the Beijing Auto Show last June. It will go head-to-head with Toyota Motor Corp's Landcruiser, Honda Motor Corp's CRVs, Mitsubishi Motors' Pajero and General Motor's Chevrolet Blazer.

Mitsubishi, which expects overall sales of SUVs in China to double to 128,000 by 2010, is expected to begin producing the Pajero Sport and Outlander models in China next month through a joint venture with DaimlerChrysler AG and Beijing Jeep Corp.