The company aimed to boost its China sales next year to 600,000 units, but could face problems because its capacity was just 500,000 vehicles per year, said Yasuaki Hashimoto, president of Nissan (China) Investment Co Ltd.

"It's a kind of challenge for next year," he told Reuters in an interview, adding that the carmaker would add extra shifts and take other ad hoc measures to address constraints.

The company, which produces cars and trucks in China with Dongfeng Motor Group Co , expects to sell more than 500,000 vehicles in China this year, well above its previous target of 380,000, as sales have soared in the country because of a range of incentives introduced by Beijing to boost the sector.

The company sold 350,000 vehicles in China last year, said Hashimoto.

To address its capacity limits, Hashimoto said the company was building a plant in the southern city of Guangzhou, to add 240,000 units of new annual capacity when it comes on line in as soon as two years.

Hashimoto said Nissan also planned to tap Chinese demand for environmentally friendly cars, first by importing electric vehicles into the country from 2011.

"I am sure we are going to build EVs (electric vehicles) in China, totally depending on demand in the country," he said. "We believe China is one of the biggest potential markets for EV."