China’s SAIC Motor Corporation is in advanced stages of planning an investment in a new vehicle assembly plant in Indonesia, according to local reports.

An Indonesia government official reportedly told the local ANTARA news agency that the Chinese auto group, along with its joint venture partners General Motors (GM) and China’s Wuling Automobile, will spend US$700m to build a new vehicle plant with capacity of 150,000 units a year.

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The plant would start operating in 2017 and produce compact microvans and/or minivans to be sold locally and across south east Asia under the GM Chevrolet and Wuling brands.

According to the report, SAIC-GM-Wuling (SGMW), in which SAIC Motor has a controlling 51% stake, GM 44% and Liuzhou Wuling Automobile close to 6%, would take an 80% share of the new Indonesian plant. The remaining 20% would be contributed directly by SAIC Motor.

SGMW is China’s largest producer of minivans and these are also sold in India through a partnership with GM India, albeit with limited success.

SGMW has been keen to expand into new overseas markets, as growth in China begins to slow. The company hopes to make inroads into the largest vehicle segment in Indonesia which is currently dominated by Japanese manufacturers such as Toyota, Daihatsu, Suzuki and Honda.

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SGMW is said to be planning a no frills microvan to be sold as a Wuling for around US$5,000 and possibly also a compact MPV. GM would likely sell a more highly specified version as a Chevrolet.

GM already has a sales network in Indonesia and a plant near the capital city Jakarta making the Spin compact MPV.