The new Zhengzhou, Henan Province-based plant will have an annual production capacity of 180,000 units, bringing Nissan's capacity in the city to 240,000 units as of 2012 from the current 60,000 units, Zhengzhou Nissan said in a statement.

The 1 billion yuan ($148.69 million) Zhengzhou Nissan plant will be the company's second-largest production site in China after Guangzhou city, in South China's Guangdong Province, said Nissan CEO Carlos Ghosn.

Nissan plans to transfer production of two vehicles - the X-trail SUV and the Qashqai sport-utility crossover - to the new plant from another factory in Guangzhou.

Additional models may be produced in the new facility, according to Zhu Fushou, Zhengzhou Nissan's chairman. As of 2012, Nissan's China capacity - including the two plants in Zhengzhou, one in Guangzhou and one in Central China's Hubei Province - is expected to climb to 1.2 million units from the current 670,000 units.

The carmaker also has plans to open a second factory in the southern city of Guangzhou in 2012.

The announcement is the second this year from the Japanese firm in China, despite overcapacity concerns voiced by government officials.

Nissan said in April it aimed to increase its China capacity to 900,000 cars a year by 2012.

Several major automakers, including General Motors and Volkswagen AG, have also announced plans to expand in China this year.

"Automakers are optimistic about the future of the market whose per capita GDP and vehicles per thousand people still leave room to explore," Zeng Zhiling, director of J.D. Power Asia Pacific Forecasting, told the Global Times.

Should future market conditions change, Nissan could tweek its capacity plans, said Zeng. "If the market is not as large (as expected) in 2012, Nissan could (always) produce less than 1.2 million units."

But the forecast for the Chineseauto sector, for now, appears strong.

"Nissan will have to expand its capacity after 2012 when 1.2 million units might not be enough," said independent auto analyst Jia Xinguang.