Nippon Steel reckons its Chinese joint venture with Baoshan Iron & Steel and European giant Arcelor could claim half of the automotive steel market in the PRC by 2010.

"We hope to obtain 50 percent of the auto use steel market for steel made in China within four to five years, including products sold by Baosteel,” Shoji Muneoka, vice president of Japan's top steel maker, told Reuters.

The three companies have so far invested USD805 million. They hope to make the operation profitable within a year.

Baosteel owns half of the joint venture, Nippon Steel 38 percent and Arcelor 12 percent. It will begin production early in 2006.

Muneoka said Nippon Steel may put money into a blast furnace plant planned by Baosteel in Guangzhou.