KONTAN.CO.ID - TOKYO. Japan's Nissan Motor and Honda Motor are considering cutting production in China as they face stiff competition from BYD and other electric vehicle makers, the Nikkei newspaper reported on Tuesday.

Nissan may lower annual production in the world's biggest auto market by as much as 30%, or about 500,000 cars, while Honda is looking at a 20% cut to around 1.2 million vehicles, Nikkei said.

A Nissan spokesperson said the contents of the report were not true without elaborating. A Honda spokesperson said it had not decided to reduce production to about 1.2 million vehicles in China, declining to comment further.

Nissan is reorganising production bases with Chinese partners and seeking to use excess capacity to produce cars for export to other countries in Asia, Nikkei said.

Sales of Nissan, which is Japan's third-largest automaker by volume, dropped by 16.1% in China last year to less than 800,000 vehicles, company data showed.

Those of Honda, Japan's biggest car maker after Toyota Motor , were down about 10% in China to 1.2 million vehicles over that period, its data showed.

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The emergence of fast-growing Chinese brands has led foreign rivals to lose market share in China.

Nissan operates eight factories in the country through a joint venture (JV) with Dongfeng Motor.

Honda operates four factories in China through a JV with GAC Group that traces its roots to the late 1990s, and three other factories through another JV with Dongfeng it set up in 2004.

Dongfeng and GAC did not immediately respond to a request for comment.

Nissan said in November it will begin exporting cars from China to other overseas markets from next year, initially aiming for annual volumes of between 100,000 and 200,000 units.

Nissan CFO Stephen Ma said last month the company's sales forecast was scaled back due to its performance in China.

In a sign of the pressure Japanese automakers have been under in China, smaller peer Mitsubishi Motors decided last year to end production of its cars at its JV in the country.

Editor: Wahyu T.Rahmawati