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Nissan planning to build $785M plant in China

The plant is part of Nissan's effort to increase its China volume by 84 percent by 2015.

Nissan has overcome a late start to become the best-selling Japanese automaker in China, with a new report suggesting the company has ambitious plans to push its expansion in the key market even further.

Nissan intends to build a $785 million plant in Dalian, a city in northeast China, a source close to Nissan told Reuters. The facility, which Nissan will jointly own with its local partner Dongfeng Motor Group Co., will grow from an initial capacity of 25,000 units when production commences in 2014 to 240,000 units by 2017.

"They will be making Nissan's more upscale SUVs, sedans and MPVs in the new plant. A ground-breaking ceremony has been planned for later this month," the source revealed to Reuters.

The new plant comes as foreign automakers increasingly seek to expand out of their established market regions within China in search of increased sales. In the past, companies had essentially separated China into five different territories, building strength in specific regions based on their local partnerships.

Volkswagen, which had long focused nearly exclusively on east and north China through its alliance with SAIC Motor Corp. and FAW group, is now working on its first southern plant in Guangdong province. Meanwhile, Nissan's new plant marks the company's expansion out of its central stronghold into VW's territory.

The new factory is part of Nissan's $4.7 billion planned investment in China as it seeks to boost sales in the region to 2.3 million units by 2015. The automaker's Chinese volume totaled 1.25 million vehicles in 2011.