By Sean McLain 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 28, 2018).

TOKYO -- Nissan Motor Co. said Monday it has started producing its first made-for-China electric car, leading a wave of electric vehicles planned by Japanese makers looking to boost sales in the country.

China, the world's biggest car market by sales, is becoming a critical part of Japanese companies' growth plans for both gasoline-powered and electric vehicles, while uncertainty clouds their U.S. business because of possible tariffs by the Trump administration on imported cars and car parts.

Nissan said its joint-venture factory in southern China started making a battery-powered version of the Sylphy compact, its best-selling vehicle in the country. (The car is known as the Sentra in the U.S.) A lower-priced electric model is set to follow next year, and by 2022 Nissan plans for about a third of its China sales to be battery-powered vehicles.

Nissan and its Japanese competitors Toyota Motor Corp. and Honda Motor Co. are collectively introducing more than a dozen battery-powered vehicles in China in the next few years, and they are also stepping up production of conventional gasoline-powered cars.

The U.S. is still the most important market for Japan's big three, but China is closing the gap. Nissan sold 1.59 million cars in the U.S. last year, and 1.52 million in China. Toyota sold 1.29 million vehicles in China last year, compared with 2.43 million vehicles in the U.S. At Honda, China represented 28% of global sales last year, behind 30% for the U.S.

Car makers need to boost production of plug-in vehicles to keep growing in China. Next year, Beijing will start mandating that a certain percentage of vehicles produced in China be electric.

In June, Nissan said it would add an eighth factory in China, taking over an existing factory owned by Chinese joint-venture partner Dongfeng Motor Group Co. The plant will produce about 120,000 Nissan vehicles a year.

The production expansion is part of the Yen1 trillion ($9 billion) that Nissan and Dongfeng have said they plan to spend in China through 2022. Much of that spending will go toward boosting manufacturing capacity by around one million units, a Nissan spokesman said.

Toyota has said it plans 10 electric and plug-in hybrid vehicles in China by 2020. The company has ambitious growth targets in China, hoping to increase sales there to 1.4 million this year. To do so, it needs to expand local production. Toyota can produce about 1.2 million vehicles in China.

A construction tender posted this month on a government website in Tianjin, where Toyota produces its Corolla sedan and C-HR compact sport-utility vehicle with a local partner, said the company was planning to spend around $258 million to expand the plant to build 120,000 electric vehicles and plug-in hybrids.

Toyota's other Chinese partner, Guangzhou Automobile Group Co., said Toyota was planning to spend around $390 million to expand an existing plant that produces the Camry and a version of the Corolla.

Honda said in April it would introduce a new electric-vehicle brand called Everus for Chinese customers. The first Everus model goes on sale later this year.

Yoko Kubota in Beijing contributed to this article.

Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

August 28, 2018 02:47 ET (06:47 GMT)