Beijing Automotive Industry Holding Company (BAIC), which has a joint venture with Daimler's Mercedes-Benz, has agreed to spend RMB3.6bn (US$591m) on a new automotive production joint venture in China’s Yunnan province, in cooperation with Yunnan Jingcheng Group.

According to the agreement, a new assembly plant is scheduled to begin produciing SUVs and commercial vehicles in 2015 and ultimately will have capacity of 150,000 units a year.

In a statement, BAIC said it sold over 1m vehicles in the first half of 2013, with revenues rising 34.5% to CNY125bn ($20.51bn) and earnings up 18.6% to CNY8.1bn.

BAIC has five industrial bases in mainland China, mainly as a result of consolidation within the country’s automotive sector as the industry tried to modernise and increase efficiency. Full year sales are expected to exceed 2m units this year.

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