TOKYO (Reuters) - Japan's Nissan Motor Co will sell its Infiniti luxury brand autos in its home market, seeking to capture growing demand for upscale cars and to better compete with German rivals such as BMW, the Japanese business daily Nikkei reported.

The company will release the redesigned Skyline luxury sports sedan under the Infiniti brand as early as this winter, the Nikkei said.

The Skyline is sold as the Infiniti Q50 in the United States for a base price of $36,700 (3.6 million yen). The price and sales target in Japan have yet to be set. A plant in Tochigi Prefecture will handle production, the Nikkei said.

A Nissan spokesman could not be immediately reached for comment on the report.

The automaker intends to sell the new Infiniti-brand cars at existing Nissan dealerships, with no plan to establish an exclusive sales network for now. Whether the lineup is expanded in Japan will depend on sales trends, Nikkei said.

Nissan chief executive Carlos Ghosn set a new profit target in May for the Infiniti, which in recent years had hardly contributed to the automaker's operating profit as it struggled to export profitably with a persistently strong yen.

Infiniti, produced mostly in Japan and exported overseas, accounted for less than 1 percent of Nissan's operating profit in the last two years, Ghosn told reporters at the time.

But Infiniti will meet its own operating profit margin target this fiscal year, as a weaker yen and a low depreciation charge would help it offset the launch costs of the new Q50 model, Infiniti's president, Johan de Nysschen, told Reuters in an interview at the Frankfurt motor show last month.

De Nysschen said he expected the brand to achieve its target for an operating profit margin of 6-7 percent in the business year ending in March 2014.

(Reporting by Lisa Twaronite and Yoko Kubota; Editing by Robert Birsel)