Tokyo – As part of efforts to reduce traffic congestion during the 2008 Olympic Games, the city of Beijing is forming an unusual technology partnership with Nissan Motor Co. to install a citywide navigation system.

Tokyo-based Nissan, a latecomer to China that is trying furiously to catch up with rivals Toyota Motor Corp. and Honda Motor Co. in car sales, approached Beijing city officials last year with a new technology dubbed “Star Wings.” Using an existing Beijing system for collecting traffic data, the Nissan technology will transmit real-time information to drivers via a wireless network to monitors in cars, so they’ll know the quickest route to take and which streets to avoid.

“The infrastructure was already there. We just needed to give them a way to develop it and transmit it,” says Minoru Shinohara, the senior vice president at Nissan who oversaw the development of the system. Beijing officials declined to comment.

Nissan is expected to announce the project in Beijing today along with city officials. The car maker will pay for the technology and installation, while the city is paying for the infrastructure to monitor and transmit the information. Nissan wouldn’t disclose how much it is spending on the project, which starts next year.

However, the scope of the system that will be in place in time for the Olympics in August 2008 remains to be seen. Nissan’s goal is to put its technology into a fifth of Beijing’s 3 million cars by that time. This would, according to Nissan’s preliminary tests, cut down on the city’s traffic congestion by up to 20%, by dispersing traffic more evenly throughout the city.

But with only around 5% of the Chinese market, Nissan can’t reach that goal if the technology is limited to its own cars. The company says it hopes to find partners such as rental-car companies, taxi fleets or other car makers who agree to put its system into vehicles.

It adds that much depends on the Beijing government and how it intends to use the technology.

Cities such as Singapore and Stockholm have similar systems to the one planned for Beijing, designed by various companies. Toyota has been particularly advanced in developing intelligent transportation systems that involve navigation devices. Of the 26 million cars with built-in navigation devices in Japan, 1.2 million are able to get real-time information on traffic jams and the quickest routes to take. “The government would like to spread car navigation, but users need to decide how much they’re willing to pay for it,” says Hiroshi Fukushima, an official in Japan’s transportation ministry.

Beijing’s size and rate of growth make it a model for other mega-cities looking to use similar systems. In the city of over 11 million residents, more than 1,000 new vehicles are registered daily, city officials say. There are currently 2.88 million vehicles in Beijing, up from only 1.34 million five years ago, according to the National Bureau of Statistics.

Ahead of the first Olympics held in the world’s most populous country, Beijing is spending more than $40 billion on projects aimed at handling the crowds, including roads, subways, sports stadiums and an airport terminal. “Intelligent transportation system technology is a big part of [the government’s] strategy,” says Huiming Gong, who oversees transportation projects for the China Sustainable Energy Program, a Beijing-based nongovernmental organization that consults with the Chinese government.

The Beijing Transportation Information Center had already been experimenting with technology to cut down on congestion. The city installed devices in around 10,000 of its some 60,000 taxis to collect traffic information that is sent to BTIC headquarters. Information on accidents and congestion is published on the center’s Web site to help drivers plan their trips. The city also uses sensors to monitor buses. If there’s a bottleneck, Beijing officials can tell bus drivers to take a different route.

Meanwhile, Nissan has been trying out technology similar to Star Wings in Yokohama, Japan’s second-largest and most congested city. In the small-scale test, traffic information is gathered through wireless transmissions from cars, traffic lights and pedestrians. The data is routed to a central hub for processing and then transmitted to cars on navigation monitors similar to GPS screens.

Nissan believes having Star Wings technology in its own cars in Beijing will be a feature it can tout to try to draw customers away from the competition. Nissan entered China in 2003, the last among Japan’s big auto makers, and is making a push to increase the number of Nissan dealerships to 410 by the end of this year from 330 last year. It sold 200,000 vehicles in China in 2006, compared with Honda’s sales of 320,000 last year. Toyota, meanwhile, is on track to meet its target to sell over 400,000 vehicles in China this year.

Nissan says it is in discussions with city officials in Shanghai and Guangzhou to install the Star Wings system there as well.

Some transportation experts say this type of technology is a short-term solution. Michael Walsh, an independent consultant who works on motor-vehicle issues in China, says the Nissan system has one major drawback: It doesn’t reduce the number of cars on the road. “I put it in the same category as building more highways,” he says.

Beijing has closely studied London’s strategy of charging a fee to drivers who enter the city during rush hour, introduced in 2003. Drivers can pay the fee via text message or over the Internet. The city uses hundreds of cameras to photograph license plates and determine who has paid. London’s strategy cut down the number of cars in the city by 16% in three years, and similar efforts are being considered by U.S. cities such as Dallas, Miami and New York.

The Beijing government said earlier this month that it will test a program next month that will ban one million cars from the city for up to two weeks. To encourage people to take public transportation, it recently lowered the price of a bus ride to 0.4 RMB (about six cents) from one RMB. The city has some limits on trucks entering from the suburbs and has considered imposing fees and stricter restrictions.

These strategies might not be as high-tech as Nissan’s but they will be more effective in the long term, says Tang Dagang, director of the Vehicle Emission Control Center of the State Environmental Protection Administration. “Economic strategies might be the only way to improve congestion,” Mr. Dagang says. Clear the roads “and more cars come.”