Guangzhou Automobile Group (GAC Group) this week began construction of a new vehicle assembly plant in Yichang in China's central province of Hubei.

The company said the new plant will have a production capacity of 200,000 vehicles per year at full swing. It is scheduled to begin operations in June 2019.

GAC Group plans to invest CNY3.5bn (US$540m) in the facility, which will also include a components manufacturing park. The plant is expected to produce new-energy vehicles to help the company meet growing minimum sales quotas mandated by the government.

GAC Group is headquartered in the southern city of Guangzhou and is one of China's main state-owned automakers. It has joint ventures with Honda, Toyota, Isuzu, Mitsubishi and Fiat-Chrysler, and produced and sells its own vehicles under the Trumpchi, Gonow and Changfeng brands.

GAC Group and its joint ventures produced a total of 1.84 million vehicles in the first eleven months of 2017, an increase of almost 24% on the same period of last year.

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