Beijing-based BAIC Group is to build a new car plant in east China after signing a strategic framework agreement with the Zhenjiang municipal government in Jiangsu province.
BAIC, which has joint ventures with Daimler and Hyundai Motor, will purchase and restructure the existing Zhenjiang Automobile manufacturing plant where it will spend CNY15bn (US$2.42bn).
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The plant will produce up to 150,000 SUVs and MPVs a year whe the first phase of the project is complete. A second phase will focus on manufacturing medium- to high-end passenger cars, new energy vehicles and core parts including engines.
Capacity will eventually be 300,000 vehicles annually.
The Zhenjiang plant, located 64 km east of provincial capital of Nanjing, is a state-owned enterprise but there has been little investment over the past decade despite the boom in the Chinese auto market.
BAIC has established several manufacturing bases across China amid its expansion efforts. According to its development plan, the group aims to build 3.5m vehicles by 2015, up from 1.7m in 2012.
