(Recasts, updates with details, adds byline)
By Scott Hillis
BEIJING, Nov 24 (Reuters) - Nissan Motor Co expects sales in China to quadruple by 2007 as Japan's third-biggest car maker plays catch-up with its rivals in the world's fastest growing major car market.
Dongfeng Motor, half of which is owned by Nissan, expected to sell 74,000 cars in China this year, 90,000 in 2004 and 300,000 in 2007, Katsumi Nakamura, chief executive of the venture, said on Monday.
Dongfeng would also sell 226,000 trucks, vans and buses this year, with sales rising to 320,000 in 2007, Nakamura said.
Outlining Dongfeng's business plan for the next four years, Nakamura said sales would reach 17 billion yuan ($2.05 billion) in 2003, with operating profit of 1.36 billion yuan.
Sales would hit 40 billion yuan next year, with operating profit seen at 3.2 billion yuan. By 2007, Dongfeng expected to book sales of 80 billion yuan with an operating profit margin of 10 percent or 8.0 billion yuan ($966.5 million).
Nissan, which is 44 percent owned by France's Renault , reported in October global first half operating profit of 401 billion yen ($3.69 billion) and an operating margin of 11.3 percent.
"We aim to create valuable and profitable growth as we establish Dongfeng Motor Co as a globally competitive automotive manufacturer," Nakamura said in a statement.
Nissan, which announced its $2 billion joint venture in June, trails rivals such as Volkswagen AG , which sold more than 490,000 cars in China in the first nine months, and General Motors , which sold more than 267,000 in the period.
But analysts say Nissan is trying to make up for lost time by offering a wide range of models.
"PRINCIPLE OF CAUTION"
Nissan now made the Sunny sedan in China and would launch the Teana luxury model next year, one of six new models to hit China by 2006, Nakamura said.
China's car sales have grown in the high double digits for the past couple of years, but Dongfeng chairman Miao Wei said the company was not counting on such growth continuing.
"We have seen growth of 60 percent, 70 percent a year. This cannot last too long," Miao said.
"In looking at the market, there are a lot of elements we cannot control, so we adopted a principle of caution when we prepared the forecasts," Miao said.
China's car output rocketed to 1.44 million in the first nine months, up more than 87 percent from a year earlier, official figures show, prompting fears of a margin-sapping glut as auto makers pump billions of dollars of investment into the country.
To hit those targets, Dongfeng would spend 15 billion yuan on capital expenditures over four years, he said.
While he did not give a complete breakdown, Nakamura said Dongfeng would spend 4.0 billion yuan in 2004 and 3.5 billion yuan in 2007.
Most of the investment would come from Nissan and Dongfeng's coffers, though the companies could raise some funds from banks, he said without elaborating.
Dongfeng was exploring how to set up car financing in China but felt that business was very risky because of the lack of a national database of individual credit ratings, he said.
($1 = 8.276 yuan)
($1=108.68 Yen)