Mitsubishi Motors Corp will set up an automaking venture in China with Hunan Changfeng Motors Co to meet increasing demand for sport-utility vehicles (SUVs) in the world's second-largest auto market, its Chinese partner said.

"Both Changfeng and Mitsubishi will gain," Changfeng Chairman Li Jianxin said in an interview with Bloomberg News at the Detroit motor show yesterday.

"Mitsubishi will be able to sell more vehicles in China, while we can tap their management and technology to help our expansion in other markets."

Mitsubishi, Japan's fastest-growing auto exporter, follows Toyota Motor Corp and Nissan Motor Co in adding capacity in China, as economic growth boosts demand for vehicles.

The venture may also help Changfeng, which generates 70 percent of sales from the government, sell more vehicles to companies and individuals.

"Having a venture like that will help Mitsubishi sell more vehicles in China," said Wang Liusheng, an analyst with China Merchants Securities Co in Shenzhen.

"Changfeng will be able to add more models in its lineup."

The venture will initially make as many as 100,000 sedans and SUVs a year, Li said at the North American International Auto Show.

This tally may eventually double, he said, declining to provide a timeframe for the project.

(Shanghai Daily January 15, 2008)