According to the latest reports, Nissan — the No. 2 automaker in Japan is all set to begin production of Infiniti cars in China starting from 2014 as a part of challenging German supremacy in the world’s largest auto market. China is importing Infiniti cars since 2007.  Now it wants to produce the cars at a 2 billion yuan ($315 million) plant in China to compete with its major rivals such as Audi, Mercedes and BMW, which have been producing luxury vehicles for years. What made them think to produce Infiniti cars are its increasing demand. For instance, Nissan sold about 19,000 Infiniti cars in China in 2011, which is more than Audi delivered in the same year. Nissan made clear that two Infiniti models would be developed in the Chinese plant. The models are yet to be named and also the facility in Xiangyang city in central China would have an initial capacity of 130,000 vehicles, rising to 250,000 eventually, according to the statement.

“It’s a necessary step if Infiniti wants a bigger share of the Chinese market,” said Jenny Gu, a manager with industry consultancy LMC Automotive. “Local production would provide the volume it needs to catch up with the German brands and help to offset a rising yen” that makes cars imported from Japan more expensive,” he added.

According to LMC Automotive — a research firm, Nissan outsold Toyota to become the top Japanese light-vehicle brand in China last year for the first time. It says the Infiniti plant would set Nissan in a top position than Toyota and Honda in China’s luxury car segment. Besides, General Motors and Honda also expect their positions to be safe and want to take a bigger share of the Chinese market. Nissan targets total sales of 500,000 Infiniti vehicles globally by 2016 and hence the company plans to localize Infiniti production in the United States and Europe.

“The localization of Infiniti at our Xiangyang plant is a significant milestone for us,” said Kimiyasu Nakamura, president of Dongfeng Motor Co, Nissan’s joint venture with Dongfeng.

via Autonews