China’s BAIC Group signed an agreement with local strategic partners to build a vehicle manufacturing base in the southern city of Ruili, close to the Myanmar border.

BAIC Yunnan Ruili Automotive Company has joined forces with Chinese diesel engine producer Kunming Yunnei Power Company, Chongqing International Composite Materials Company and automation specialist Efort Intelligent Equipment Company, to build a vehicle manufacturing complex.

The facility will have an initial annual production capacity of 50,000 vehicles in 2019, but this is scheduled to increase to 100,000 vehicles by 2020.

BAIC Yunnan Ruili is a joint venture founded in 2013 between BAIC Group and Yunnan Jingcheng Group Company with an investment capital of CNY3.6bn (US$542m).

The plant will produce passenger vehicles, pickup trucks and new-energy vehicles, worth some CNY20bn annually at full capacity. Around 50% of output will be targeted for export, including 25% for sale in South-east Asia, hence the location in China’s south. New Energy Vehicles are also a focus for China’s auto industry, encouraged by government incentives.