Nissan Motor plans to increase its production capacity in China by 30% next year, aiming to tap a recovery in demand in the world's biggest auto market as it seeks to turn around its loss-making business, the Yomiuri newspaper reported on Tuesday.

The Japanese carmaker will set up production lines at two factories owned by joint venture partner Dongfeng Motor Group in Wuhan, Hubei province and in Changzhou, Jiangsu province, boosting its production bases in China to six from four now, the Yomiuri said.

That will enable Nissan to raise its annual production capacity there to 1.8 million vehicles from 1.4 million, ahead of Japanese rivals Toyota Motor and Honda Motor in Chinese output capacity, the Yomiuri said.

Nissan will also release seven new models in China by 2022, including its new electric vehicle Ariya, the Japanese newspaper said.

Nissan did not comment directly on the reported plan. It said by email that the overall progress of its projects was on track despite the impact of the COVID-19 pandemic.

The company also said it had been keeping a healthy utilisation rate at the Dongfeng Nissan plants while closely watching consumer trends and sales growth.

In July, Nissan warned of a record 470 billion yen ($4.5 billion) operating loss this year and its lowest sales in a decade as the pandemic hampers its turnaround efforts.