TOKYO - NISSAN Motor Co and Honda Motor Co plan to raise their output capacity in China to tap brisk demand in the country, which overtook the United States as the world's biggest car market in January-June, the Nikkei business daily reported.

Nissan, Japan's third-largest carmaker and which is 44 per cent owned by France's Renault SA , will boost production capacity at its joint venture Dongfeng Motor Co by about 20 per cent to around 560,000 units a year from October, the Nikkei said.

The joint venture's main factory in the city of Guangzhou will begin operating three production shifts a day instead of the current two. The joint venture will also hire 1,200 more workers, the newspaper said.

Nissan officials were not immediately available for comment.

Honda, Japan's No.2 automaker, plans from this summer to lift annual output capacity to 200,000 units from 120,000 units at a factory in Hubei Province operated by Chinese joint venture Dongfeng Honda Automobile Co, and eventually target annual capacity of 240,000 units, the Nikkei said.

Honda also plans to boost the number of dealerships in China by 12 per cent to 760 by the year-end due to strong sales of the Civic sedan, the paper said.

Shares of Nissan jumped 5.9 per cent to 538 yen while those of Honda gained 2.5 per cent to 2,430 yen. The benchmark Nikkei was up 1.7 per cent. -- REUTERS