Nissan Motor Co., which on Monday reported flat sales growth in China, is attempting to regain momentum by focusing on the country's fast-growing market for small affordable vehicles.

 

But analysts predict sales by the Japanese automaker and its Chinese joint-venture partner will likely remain sluggish for several more months.

 

Nissan's April sales in China rose 0.7 percent year on year to 96,200 vehicles. The joint venture's sales for the first four months of the year inched up 0.8 percent to 394,800 vehicles. Nissan said it still aimed to sell 1.3 million vehicles this year in China.

 

Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight, said Nissan and certain other global automakers made a mistake in neglecting no-frills brands, such as Venucia for Nissan, which they set up several years ago in China.

 

Demand has been strong for no-frills vehicles from indigenous Chinese automakers such as Great Wall Motor Co., helping to erode the market share of foreign automakers in China.

 

"They can't compete effectively because their offerings in cheap, no-frills SUVs are thin," Zhang said, referring to Nissan and other global automakers.

 

One notable exception has been Baojun, a China-only brand of affordable cars run by General Motors jointly with its local Chinese automakers. GM said earlier this month that Baojun produced sales of 37,915 vehicles in China in April, up 56 percent from a year earlier.

 

Venucia, Nissan's local China brand that competes head-on with Baojun and indigenous Chinese brands, has much ground to gain, Zhang said.

 

Nissan became aware of the challenge in late 2014 and has been scrambling since to come up with a remedy: an array of new and redesigned models to boost Venucia sales, Jun Seki, Nissan's China chief, told Reuters last month on the sidelines of the Beijing auto show.

 

"We hadn't really seen this trend coming, but since late 2014 and the start of last year, we began adjusting our strategy," Seki said.

 

As a result, several new Venucia models are going to hit showrooms in China starting later this year.

 

Foreign global automakers accounted for more than 65 percent of China's passenger car market until 2014, according to Seki. That share fell to below 60 percent last year, and it continued to shrink to 56 percent in the first quarter of this year, chiefly because of the popularity of small, affordable SUVs from indigenous Chinese no-frills brands.