Nissan Motor Co, Japan's third-biggest automaker, and China's Dongfeng Motor Corp will begin operations at their Chinese joint venture in Wuhan, Hubei Province, on July 1, Nissan said in a press statement released on Sunday in Tokyo.

　　The company plans to start producing its Teana sedan there from 2004, according to the statement. Nissan will start making the Sunny car at the venture in July. This move dispelled industry concern that the operation of this joint-venture might be delayed due to the outbreak of SARS.

　　Tokyo-based Nissan wants to challenge more established rivals in China like General Motors Corp, Honda Motor Co and Volkswagen AG.

　　The country's vehicle market is forecast to as much as triple to 5.8 million autos by 2010, according to a McKinsey & Co report.

　　"Nissan's venture is the first step for the automaker to enter the Chinese mainland's auto market,swheresit's got huge potential to grow," said Yoshio Inamura, who helps manage the equivalent of about US million at Tokyo-Mitsubishi Asset Management.

　　In the first four months of this year, Chinese consumers bought 578,181 cars, said industry research firm, Automotive Resources Asia Ltd, representing a 95 percent year-on-year growth.

　　Nissan last year decided to invest 8.55 billion yuan (US.03 billion) for half of an auto assembly venture created from the main assets of Dongfeng, China's second-largest vehicle maker.

　　The company is targeting annual sales of 550,000 vehicles on the mainland by 2006.