The firm said on its official website it had signed a
memorandum of understanding (MOU) on Wednesday with Redes
Energeticas Nacionais SGPS SA (REN).

It marks the latest move after State Grid bought
a 25 percent stake in REN earlier this year, and follows recent
news on State Grid’s interest in taking over Spain’s power grid
operator Red Electrica.

With the MOU: “the two parties will set up technology R&D
centre in Portugal, to provide strong technology support and
business support for REN’s sustainable development, and to
expand REN’s influence and competitiveness in the Iberian
Peninsula and even in the whole of Europe,” according to the
statement.

The joint venture consulting firm will help State Grid and
REN to have more power project cooperation in
Portuguese-speaking countries, State Grid said, without
elaborating.

Portuguese media Agencia Financeira reported the joint
consultancy will be built in Brazil, and State Grid will invest
12 million euros in building the technology center in Portugal.

State Grid took its 25 percent stake in REN earlier this
year as part of Portugal’s privatisation drive under an
international bailout of its economy.

In May this year, State Grid agreed to buy seven electricity
transmission assets in Brazil from Spanish builder Actividades
de Construcción y Servicios SA (ACS).

In December 2010, State Grid bought seven Brazilian power
transmission concessions with investments totaling nearly $1
billion.

(Reporting by Wan Xu and Ken Wills; Editing by Keiron
Henderson)

The struggling French car maker, which last year had 11 percent of its sales in China, aims to almost double its sales of lower-range cars there by 2015 as it comes from behind market leaders General Motors (GM.N: Quote, Profile, Research, Stock Buzz) and Volkswagen (VOWG_p.DE: Quote, Profile, Research, Stock Buzz).

Volkswagen’s Audi, BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz) and Daimler AG’s (DAIGn.DE: Quote, Profile, Research, Stock Buzz) Mercedes-Benz dominate the premier car market in a country that is ever more important for global auto makers as economic weakness depresses sales in the West.

Europe’s second biggest automaker has made its upscale Citroen DS3, DS4 and DS5 – long, low-slung cars – available in China for the first time.

“The premier market is now 8 percent of the Chinese market, which means one million people are buying luxury cars this year,” Gregoire Olivier told Reuters in an interview.

“In 2020 we believe it will be more than 15 percent for a car market which would have doubled… The DS is addressing this new generation of premier car buyers and we think there is a lot of room even for others.”

Peugeot expects those models to compete with Volvo, in a price bracket below the German brands, rather than with the likes of Volkswagen’s Passat or the Buick Lacrosse from General Motors, at the top end of the regular car market.

The DS5 is priced at 300,000-350,000 yuan ($47,000-55,000) with the DS4 at up to 300,000 yuan, on a par with Volvo cars of similar size. Peugeot has begun opening dedicated outlets for the DS in China, designed to be more stylish than its others, and aims to have over 100 of them by 2015.

BUILDING CAPACITY

In addition to 200,000 DS cars, Peugeot aims to expand sales of other models to 750,000 by 2015 compared to the 404,000 that it sold in China last year. It is introducing four new Peugeot cars and four additional Citroen models apart from the DS range.

The picture is a sharp contrast from Europe. Peugeot said on Thursday it was looking for additional cost savings and freeing capacity at one of its two Paris plants to prepare for the other’s closure.

Olivier expected the Chinese expansion to keep on track despite a slowdown in car market growth after the withdrawal of government incentives for buyers in 2010.

He expected China’s overall car market would continue to grow at 8-10 percent in the coming years due to low penetration in smaller cities and rural areas.

Last year, Peugeot started work on its third China plant, jointly run with Dongfeng Motor Group Co (0489.HK: Quote, Profile, Research, Stock Buzz), which will give the partners a total capacity of 750,000 vehicles by 2015.

Peugeot is also building a factory able to produce 200,000 cars a year with China Changan Automobile Group for its DS line up.

GM – which has an alliance with Peugeot – Nissan Motor (7201.T: Quote, Profile, Research, Stock Buzz) and Honda Motor (7267.T: Quote, Profile, Research, Stock Buzz), are also playing catch-up to the Germans in China’s premier market.

Nissan will make Infiniti cars in China from 2014 and GM expects Cadillac sales to match U.S. levels by 2015 or 2016.

GM sold over 2.5 million vehicles in China last year. Half of them were cheap minivans.

($1 = 6.3554 Chinese yuan)

(Editing by Matthew Tostevin)

The plant, in Dalian city, is part of Nissan’s 30 billion yuan investment in China by end-2015, vying with General Motors (GM.N: Quote, Profile, Research, Stock Buzz) and other global automakers also looking to the emerging Asian giant for growth as more developed markets stutter.

It also illustrates how the big foreign carmakers are now venturing on to each other’s turf in China to broaden their appeal. In the past decade, foreign brands have carved up China into five territories, building fiefdoms based on their local partnerships. That’s now changing as the rivals set up camp in each other’s backyard.

Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz) has been strongest in east and north China through its tie-up with domestic leader SAIC Motor Corp (600104.SS: Quote, Profile, Research, Stock Buzz) and FAW Group, leaving the southern market mostly to Japanese rivals. But the German brand is building its first plant in Guangdong province in the south. It said in November its market share in the south had risen to 15.8 percent from 12 percent two years earlier.

Similarly, GM, which has been making cars for more than a decade in Shanghai, recently unveiled plans for a greenfield facility in the central city of Wuhan, a Nissan stronghold, and Ford Motor (F.N: Quote, Profile, Research, Stock Buzz) is venturing outside its southwest ‘base’ to build a plant in Hangzhou, near Shanghai and GM’s patch.

A production base in Dalian, the wealthiest coastal city in the northeast, analysts say, would give Nissan easy access to a regional market where Volkswagen and Toyota have been making their Jetta and Corolla models for years.

“Nissan will become a major rival for Volkswagen and Toyota in north China with the new plant. It will be cheaper and faster to ship parts to Dalian compared to Wuhan as Dalian is a major port city not that far from Japan,” said Sheng Ye, associate research director for Greater China at consultancy Ipsos.

Dalian had also attracted Fuji Heavy Industries’ (7270.T: Quote, Profile, Research, Stock Buzz) Subaru, which sought approval for a factory there for its ill-fated venture with Chery Automobile CHERY.UL.

GROUND-BREAKING

The Dalian plant, jointly-owned by Nissan and its local partner Dongfeng Motor Group Co (0489.HK: Quote, Profile, Research, Stock Buzz), will have an initial capacity of 25,000 cars when it begins production in 2014, the source told Reuters. Capacity would be phased up to 120,000 by 2015 and 240,000 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 person said. Executives at the joint venture could not immediately be reached for comment.

“Nissan has a more diversified portfolio in China and has put out more offerings than many of its rivals already. It could bring more of the latest models into China and further expand its appeal with this new plant,” said John Zeng, Asia Pacific director of consultancy LMC Automotive.

China is already Nissan’s largest market even though it arrived much later than GM and Volkswagen. CEO Carlos Ghosn unveiled an ambitious target last July to boost China sales to 2.3 million vehicles in 2015, part of a mid-term business plan to raise Nissan’s global market share and profit margin to 8 percent in six years.

To reach that growth target, Nissan’s China venture plans to launch about 30 new products during the period, including an electric vehicle under the joint-venture brand name Venucia, said Ghosn.

Nissan sold 1.25 million vehicles in China last year, up 21.9 percent from a year earlier, twice as many as Honda Motor (7267.T: Quote, Profile, Research, Stock Buzz), which saw its sales dip 4.5 percent. Toyota delivered 883,000 cars in China last year, down 4.4 percent.

To accelerate its China expansion, Nissan will also start making its Infiniti cars at a $315 million plant in Xiangyang in the central Hubei province in 2014 to challenge Audi (NSUG.DE: Quote, Profile, Research, Stock Buzz), Mercedes Benz and BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz) in the luxury segment.

Car sales in China rose 22.6 percent in May from last year, extending April’s double-digit gain. January-May deliveries of sedans, sport utility vehicles, multi-purpose vehicles and minivans climbed 5.5 percent to 6.33 million, according to the China Association of Automobile Manufacturers. Industry executives predict the market could grow 5-10 percent this year on strong demand in lower-tier cities.

(Reporting by Fang Yan and Ken Wills; Editing by Ian Geoghegan)

The plant, in Dalian city, is part of a scheme by Nissan to
invest 30 billion yuan in China by the end of 2015, racing
against General Motors and other global automakers which
are also looking to China for growth as more developed markets
stutter.

“Nissan has a more diversified portfolio in China and has
put out more offerings than many of its rivals already. It could
bring more of the latest models into China and further expand
its appeal with this new plant,” said John Zeng, Asia Pacific
director of industry consultancy LMC Automotive.

The Dalian facility, jointly-owned by Nissan and its local
partner Dongfeng Motor Group Co, will have an initial
capacity of 25,000 cars when it begins production in 2014, the
source told Reuters. Capacity would be phased up to 120,000 by
2015 and 240,000 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 person said.

Executives at the joint venture could not immediately be
reached for comment.

China is already the largest market for Nissan even though
it arrived much later than GM and Volkswagen.

Nissan CEO Carlos Ghosn unveiled an ambitious target last
July to boost China sales to 2.3 million vehicles in 2015, part
of its mid-term business plan to raise the company’s global
market share and profit margin to 8 percent in six years.

To reach that growth target, Nissan’s China venture plans to
launch about 30 new products during the period, including an
electric vehicle under the joint-venture brand name Venucia,
said Ghosn.

Nissan sold 1.25 million vehicles in China last year, up
21.9 percent from a year earlier, twice as many as Honda Motor
, which saw its sales dip 4.5 percent. Toyota Motor
delivered 883,000 cars in China last year, down 4.4
percent.

Company leaders attending the International Air Transport Association (IATA) meeting in Beijing said they have renewed concerns about the outlook for the country’s biggest carriers, all of which were bringing in hefty profits only two years ago.

“The drop-back of oil prices may help, but it may be offset by further weakness in terms of consumer confidence,” said Andrew Herdman, director general of the Association of Asia Pacific Airlines. “We learnt in the global financial crisis (that) when headlines look very bad, even if it’s a story in America or Europe, people become more cautious.”

Crude oil prices have fallen more than $20 per barrel in May, but cautious consumer behaviour led to a steady drop in the annual growth rates of air passenger volumes in China, from 15.8 percent in 2010 to 9.2 percent in 2011 and 6.9 percent in April this year, according to official data.

All top three Chinese carriers – China Eastern Airlines (600115.SS: Quote, Profile, Research, Stock Buzz) (0670.HK: Quote, Profile, Research, Stock Buzz) Air China 60111.SS(0753.HK: Quote, Profile, Research, Stock Buzz) and China Southern (600029.SS: Quote, Profile, Research, Stock Buzz) (1055.HK: Quote, Profile, Research, Stock Buzz) – reported a more than 70 percent slump in their latest quarterly earnings.

Air China’s January-March net income plunged 85.7 percent from a year ago to 239.1 million yuan. China Southern and China Eastern were down 74.2 percent and 73.7 percent, respectively.

Passenger volume is projected to be much higher in the second half of 2012 when leisure travel rises in the summer, and a week-long national holiday in October, industry observers say. But slumping cargo throughput, which swung to an annual 6.9 percent decline in April, is unlikely to turn positive in the near term.

“We will still make some profit this year, but it would definitely be a year-on-year decline in terms of growth rate,” said Liu Shaoyong, chairman of China Eastern, adding that the carrier’s cargo business has been losing money, largely as a result of weak global trade.

UNDER PRESSURE

Other Asian carriers are also under pressure.

Japan Airlines chairman Masaru Onishi said the airline’s Europe-bound cargo volume from Japan and the rest of Asia was down about 5 percent from a year ago, continuing a sluggish trend that began in April.

Cathay Pacific Airways’ (0293.HK: Quote, Profile, Research, Stock Buzz) cargo business fell more than 10 percent in the first four months year-on-year, according to its chief executive, John Slosar.

The Chinese government, which bailed out its money-losing state carriers during the global financial crisis in 2008, is again ready to rescue them, even though the top three airlines are not burdened by billions of dollars losses as they were four years ago.

China Southern and Air China are set to receive a combined 3.05 billion yuan from the government, while aid is also on the way to China Eastern, according to its chairman Liu.

Airline cash injections are part of Beijing’s economic policy package, which includes its first interest rate cut in ALMOST four years, aimed at shielding its economy from the euro zone’s deepening debt crisis.

“Chinese airlines are affected by a slowing global economy, especially on the cargo side, but they are definitely not in a crisis mode as they were in 2008,” said Yu Nan, an industry analyst with Haitong Securities.

(Reporting by Fang Yan and Ken Wills; Editing by Daniel Magnowski)

In May a total of 1.28 million sedans, sport utility vehicles (SUVs), multi-purpose vehicles (MPVs) and minivans were sold in the country, the China Association of Automobile Manufacturers (CAAM) said. In the same month of 2011, that number was 1.04 million.

From January to May, deliveries climbed 5.5 percent to 6.33 million, continuing an uptrend which started in April.

The strong rebound by Toyota Motor (7203.T: Quote, Profile, Research, Stock Buzz) and Honda Motor (7267.T: Quote, Profile, Research, Stock Buzz), which both suffered severe shortages of parts a year ago after northern Japan’s devastating earthquake and tsunami in March 2011, also pushed up the monthly tally.

Demand is likely to remain solid if Beijing renews some of its policy incentives which helped propel China beyond the U.S. as the world’s largest car market by volume in 2009, industry observers say.

“The incentives will help bolster demand for minivans, and cheap cars like (the) QQ, which are popular in lower-tier cities and rural areas,” said John Zeng, Asia Pacific director at industry consultancy LMC Automotive. “If such policy incentives do come out as expected, sales in the second half would definitely be better than the first half.”

A source told Reuters late last month that Beijing would soon resume paying subsidies to rural residents who trade in old vehicles for new, fuel efficient ones to rekindle automobile demand amid a market slowdown.

Beijing introduced a series of stimuli in 2009, including tax incentives for small cars, but China’s auto market slowed significantly in 2011 after the policies expired, with annual car sales climbing 5.2 percent, down from a 33 percent and 53 percent annual gains in 2010 and 2009 respectively.

In the United States, automakers posted strong May sales gains from a year ago, but the sales rate still fell short of expectations as the broader economy softened.

Toyota and Honda saw their China car sales jumped 105 percent and 92 percent respectively.

General Motors (GM.N: Quote, Profile, Research, Stock Buzz) maintained its leading position in China helped in part by a rebound in minivan sales, which contributed to about 55 percent of its monthly tally.

SAIC Motor Corp (600104.SS: Quote, Profile, Research, Stock Buzz), a longtime partner of GM and Volkswagen AG (VOWG.DE: Quote, Profile, Research, Stock Buzz), was the big domestic winner with a year-on-year growth rate of 20.9 percent in May.

(Reporting by Fang Yan and Ken Wills; Editing by Daniel Magnowski)

Chinese-made Infiniti cars would put Nissan on a more level
playing field with Audi AG, Mercedes Benz and BMW AG
, which have been making cars in China for years,
industry observers say. Imported Infiniti cars have been
available in China since 2007.

“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, Gu said.

In a statement, Nissan said two Infiniti models – which have
yet to be named – would be produced at a factory jointly
operated with Dongfeng Motor Group, that makes Teana
and Murano models.

The facility in Xiangyang city in central China would have
an initial capacity of 130,000 vehicles, rising to 250,000
eventually, it added.

Nissan sold about 19,000 Infiniti cars in China in the last
fiscal year that ended in March, a fraction of the more than
300,000 cars market leader Audi delivered in the whole of 2011.

Nissan’s mid-term growth plan targets sales of 500,000
Infiniti vehicles globally by 2016, and the company has said
China would account for a large portion of that growth.

“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.

“It proves that we are fully capable of producing luxury
vehicles of the highest quality standards here in China, at the
same level of quality as the Tochigi plant, its mother plant, in
Japan.”

Early in the month, Infiniti relocated its global
headquarters from Yokohama, Japan, to Hong Kong, a gateway to
mainland China.

LUXURY RIVALRY

Nissan outsold Toyota Motor Corp to become the top
Japanese light-vehicle brand in China last year for the first
time, according to research firm LMC Automotive.

The Infiniti plant would spear Nissan further ahead of
Toyota and Honda Motor Co in China’s luxury car
segment, which Daimler chief executive Dieter Zetsche said could
continue to grow 15-20 percent in 2012 after years of breakneck
expansion.

Other luxury car makers, such as General Motors and
Honda, are also playing catch-up, hoping to grab a bigger share
of the Chinese market.

GM chief executive Dan Akerson expects Cadillac’s China
sales to match U.S. sales levels by 2015 or 2016.

PSA Peugeot Citroen <PEUP.PA) in late April unveiled a
sleek, large coupe-styled sedan, a precursor to the Citroen DS
luxury sub-brand it plans to introduce to China from June 28,
with an annual volume target of 200,000 vehicles within four
years.

Most Infiniti models are made in Japan. To help achieve its
goal to triple global sales of its premium brand by 2016 and
avoid foreign exchange risks, Nissan also plans to localise
Infiniti production in the United States and Europe

China launched its shale gas push in late 2009, inspired by a shale boom in the United States

Shale gas development in still at the early stage in China, where technically recoverable reserves of the unconventional fuel are estimated to be even higher than in the United States.

In its first public disclosure of requirements for bidders, the Ministry of Land and Resources said only domestic firms with registered capital of more than 300 million yuan ($47.43 million) could bid.

The firms must also have licenses to explore oil and gas or other gaseous mineral resources, or cooperate with businesses holding such licenses.

Bidders must be independent legal entities and joint bidding would not be accepted, the ministry said in a notice dated May 17 on its website (www.mlr.gov.cn), adding that interested parties should submit their interest before May 25.

It did not say when the tender would be held.

China awarded two out of four blocks offered in its first shale gas tender in June last year to China Petroleum & Chemical Corp (Sinopec) (0386.HK: Quote, Profile, Research, Stock Buzz)(600028.SS: Quote, Profile, Research, Stock Buzz) and a provincial coal seam gas company.

The government has identified 17 firms to bid for 20 blocks in the second tender, according to Chinese media reports.

China wants to find the right technology to unlock its shale gas resources in the next few years before a leap in production by 2020.

The U.S. Energy Information Agency estimates China holds 36.1 trillion cubic meters (1,275 trillion cubic feet) of technically recoverable shale gas reserves — significantly higher than the 24.4 tcm (862 trillion cubic feet) in the United States, which has the second-most.

Chinese government officials said foreign firms can enter product sharing contracts (PSC) with Chinese firms or provide engineering services, and so far only Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) has clinched a PSC deal.

State oil firms such as PetroChina (0857.HK: Quote, Profile, Research, Stock Buzz)(601857.SS: Quote, Profile, Research, Stock Buzz) and Sinopec have drilled several dozen wells on their conventional oil and gas blocks and brought in firms such as Shell, Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz) and Hess Corp (HES.N: Quote, Profile, Research, Stock Buzz) for joint studies.

Chinese state energy firms have also entered into multi-billion-dollar U.S. shale deals with Chesapeake Energy (CHK.N: Quote, Profile, Research, Stock Buzz) and Devon Energy Corp (DVN.N: Quote, Profile, Research, Stock Buzz). ($1 = 6.3252 Chinese yuan)

(Editing by Ed Davies)

The extra quotas, which would allow imports at sliding
tariffs between 5 and 40 percent, would bring total import
quotas issued so far this year to about 2.4 million tonnes, they
said.

Traders had expected government authorities to issue the
extra quotas and had stockpiled a large volume of cheap cotton
at the country’s bonded warehouses.

“Some textile mills made some new purchases last week while
others are still waiting as domestic cotton prices are falling,”
said one trading manager at an international trading house.

“Demand from textile mills is sluggish, some are running at
only 30 to 40 percent of production capacity due to fewer export
orders,” said the manager.

Expectation of a large increase in imports has pressured
local futures prices, with the most-traded September price
trading at its lowest levels since November. Even so,
domestic cotton is still more than 10 percent higher than the
same quality international cotton supplies.

“There are not many high-quality cotton supplies available
from the U.S. market and premiums are high as well. Indian
cotton is of low quality, we expect new sales from Brazil will
pick up,” said another cotton executive.

The International Cotton Advisory Committee said early this
month that the boost in Chinese imports will more than double
China’s cotton stocks to 5 million tonnes in 2011/12, and
shipments from India, Brazil and Australia could reach record
levels.

China imported about 1 million tonnes of cotton last year to
replenish depleted state cotton reserves.

Traders also believe Beijing is unlikely to release cotton
from its state reserves, after it stockpiled 3.13 million tonnes
from last year’s domestic harvest.

“The government cotton prices are very high, given that
domestic cotton is weakening and we suspect the government would
not sell its reserves now,” said the executive.

Some textile mills reached by Reuters said they expect more
quotas to be issued and will source cheap cotton from bonded
warehouses.

“Imported cotton is much cheaper and we are still interested
in buying either Indian or Pakistan cotton from bonded
warehouses,” said one manager with a textile mill in the
northern province of Shandong.

Traders estimated more than 300,000 tonnes of cotton are
stockpiled at bonded warehouses in Shandong, a major cotton
consuming area.

China imported 3.36 million tonnes of the fibre last year,
of which one third came from India, with the United States being
the second biggest provider.

Analysts expect domestic cotton consumption in the year
ending August will fall to between 7-9 million tonnes, compared
with 10 million tonnes in the previous year.

China’s textile exports have been hurt by weakening global
demand, with exports in the first four months of the year
declining 0.3 percent from a year ago.

(Additional reporting by Coco Li; Editing by Edwina Gibbs)

Demand will likely remain solid in May and June as new
models that premiered at the Beijing autoshow start to arrive at
the showrooms, industry observers said. After that, a more
subdued growth pattern, which began after Beijing’s policy
incentives expired, is likely to carry through the rest of the
summer, the slowest auto selling season of the year.

Many industry executives expect the once red-hot demand in
China to register single-digit growth rates for a second year in
a row, the slowest back-to-back years since the market first
took off in the late 1990s.

General Motors, whose joint ventures with local
Chinese automakers such as SAIC Motor Corp are key
players, expects China’s overall vehicle market to grow between
5 percent and 10 percent this year.

Following a “quieter” summer period, Kevin Wale, head of
GM’s China operations, said he is “actually bullish about the
back half of the year.”

“Some people are holding off buying,” but showroom traffic
is “still very strong” in the market, Wale said in a telephone
interview with Reuters on Wednesday. “When traffic is strong,
that means there’s underlying demand. The economy is still okay,
the government is loosening credit, making money available for
people,” he said.

Dave Schoch, head of Ford Motor China operations, said
the Chinese auto market is headed for a period of slower but
sustainable growth after growing leaps and bounds since the late
1990s.

“There may be monthly ebbs and flows of the total Chinese
auto market, but we see sustained positive momentum and growth
of about 5 percent per year for the foreseeable future,” the
Shanghai-based Ford executive said in a statement made available
to Reuters. “Today’s 18.5 million market is expected by many to
be around 30 million by 2020.”

China’s car market cooled to a 5.2 percent gain last year,
after jumping 53 percent in 2009 and 33 percent in 2010.

The slowdown has been attributed to a raft of factors, from
the end of tax incentives for small cars to authorities’ efforts
to combat traffic congestion in major cities such as Beijing.

In April, a total of 1.28 million sedans, SUVs, MPVs and
minivans were sold in the country, the China Association of
Automobile Manufacturers (CAAM) said on Wednesday. In the same
month of 2011, that number was 1.14 million.

In the first four months of the year, deliveries climbed 1.9
percent to 5.05 million, stemming a downtrend that started in
January when automakers and dealers cut working hours during
China’s long Lunar New Year holiday.

In the United States, auto sales rose 2.3 percent in April
from a year ago, helped by strong gains at Toyota Motor Corp
and Chrysler Group LLC, as American shoppers replaced
aging cars and trucks and as the broader U.S. economy showed
signs of strength.

Automobile sales in Japan, excluding 660cc mini vehicles,
rose 92 percent in April from a year earlier to 208,977
vehicles.

FOREIGN AUTOMAKERS REMAIN OPTIMISTIC

The weaker-than-expected sales growth so far this year – far
below CAAM’s projection of 9.5 percent for 2012 – was blamed on
China’s slowing economy and higher fuel prices, which have
persuaded many consumers to tighten their purse strings.

Still, many foreign executives remain committed to their
expansion plans in China where per-capita car ownership remains
low compared to mature markets.

Nissan Motor is aiming to boost its annual output
capacity in the country by two-thirds to 2 million vehicles by
the end of 2015 and its market share to 10 percent from 7.4
percent.

GM, which continues to beat the market with an 11.7 percent
gain, is adding 600 dealerships in China to bring the total to
3,500 by the end of the year. It is also committed to adding one
new Cadillac model in China each year through 2016.

“It’s true that the breakneck growth in 2009 and 2010 may
never repeat again and traffic in big cities is too crowded
already, but there is still lots of growth potential in
lower-tier cities where many people have yet to buy their first
car,” said Sheng Ye, associate research director for Greater
China at industry consultancy Ipsos.