Analysts said the Chinese government continued to support the auto industry by extending tax subsidies and its rural autos stimulus package by another year to the end of 2010.

But the market was disappointed that the tax subsidy would narrow to 2.5 percent from 5.0 percent, they said.

"There will be an impact of course. People may rush to buy before the end of the 5 pct subsidy period," said Kimiyasu Nakamura, president of Dongfeng Motor Co, Nissan's 50-50 joint venture with Dong Feng Motor Group .

"But through the next year, I think overall Chinese growth will be stable (for Nissan)," he told Reuters in an interview after a media briefing on the carmaker's 2010 business outlook.

The subsidy revision means consumers will pay 7.5 percent tax on passenger vehicles with engine sizes of 1.6 litres and below next year, from 5.0 percent currently.

"I believe the impact for the industry next year will be limited," Nakamura said.

The news has sent Hong Kong-listed carmakers lower in the past week, with Dongfeng down 4.4 percent, compared with a 0.6 percent decline in the broader Hang Seng Index .

AHEAD OF SCHEDULE

Nissan still aimed to sell 600,000 cars in China next year, up from expected sales of 517,000 this year, Nakamura said.

More broadly, he said, the joint venture aimed to sell 1 million cars, trucks and buses in 2010, up 10.5 percent from this year and well ahead of a plan to reach that milestone by 2012.

The company was on track to report 100 billion yuan ($14.65 billion) in sales for this year, he said.

Dongfeng Motor would introduce two new models in 2010 - the Global compact car and NV200 minivan - to meet growing demand in China, he said.

Nakamura said the company expected faster sales growth in China's vast inland regions, compared with more prosperous coastal provinces as people's livelihoods improved, as Beijing moved to solve economic imbalance issues.

"Thanks to those incentives and emphasis on the economic situation of inland regions, I think the growth outlook is promising," he said.