China's GAC Motor began operations at a second assembly plant as it targets fast growing demand in its local market.

The new factory, in Guangzhou, will increase annual production capacity to 400,000 vehicles per year. The company is targeting fast-growing demand for cost-effective locally-branded SUVs which have gained significant market share at the expense of foreign brands.

First off the assembly line is the newly-developed GS8 SUV with deliveries starting in October, plus the GA3S plug-in hybrid.

Demand for the GS4 SUV model in the last year has vastly exceeded capacity to produce them, according to the company. In the first six months of the year GAC's overall sales have more than doubled to 160,000 vehicles.

The company also has strengthened its R&D capabilities and plans to launch seven new models in China in the next five years.