Malaysia's Go Auto Group plans to spend MYR2bn (US$455m) on a plant in Gurun in Malaysia's Kedah state by 2021 with its Chinese partner Great Wall Motors.
Go Auto currently is the sole distributor for GWM in Malaysia, where it sells the imported Haval H1 SUV which is priced at MYR55,000 and the Haval H2 at MYR90,000.
The company is targeting 3,000 sales in Malaysia this year and also eyeing sales in neighbouring countries such as Cambodia, Vietnam, Laos and the Philippines.
The new factory is expected to become a key production hub for Great Wall SUVs and energy-efficient vehicles for south east Asia.
The spending will take place in stages, with Go Auto's CEO Ahmad Azam Sulaiman confirming to reporters at the Shanghai motor show its side of the funding will be raised internally and through domestic bank loans.
Sulaiman added the project underscores GWM's commitment to growing the brand in the ASEAN region.
He also confirmed the deadline for completion of the plans has been put back a year, from 2020, reflecting the recent sluggish Malaysian economic performance.
MYR250m is expected to be spent by 2019 on a vehicle assembly facility with capacity of 24,000 SUVs per year. This will be expanded to 50,000 soon after, in line with demand.
A third phase involves upgrading production facilities further, including more local component and engine production plus testing facilities.