CHINA: FAW Car plans new assembly plant - report
FAW Car Co., a unit of major China vehicle conglomerate FAW Group Corp., said on Tuesday it plans to invest 1.80 billion yuan to build a plant to assemble large and medium-size sedans, Dow Jones reported.
The new facility will help boost FAW's capacity to 100,000 units a year, FAW said in an announcement, cited by the news agency.
The plant should be completed by 2007, an official at the company's securities division told Dow Jones, adding that FAW Car currently has an annual capacity of about 50,000-60,000 units.
According to Dow Jones, FAW said the additional investment was aimed at enabling the company to keep up with rising demand in China for large and mid-sized sedans. The investment requires shareholder approval.
Dow Jones noted that, while car sales last year were mainly driven by demand for compact cars, analysts say sales of mid-size and large sedans is increasing.
The news agency said FAW Car's announcement comes after it reported a first-half net profit of CNY141.1 million on Tuesday, up 44% year on year, while earnings rose partly due to sales of the Mazda6 model, produced with Mazda Motor Corp. technology, and which was launched in China this year.
The official also told Dow Jones that FAW Car, which produces one of China's best known home-grown brands, the Red Flag sedan, sold 13,000 Red Flags in the first half of 2003, down from 15,000 units in the same period last year, but it sold 5,000 Mazda 6s, which bolstered overall figures.