Hyundai Motor and Chinese partner Jiang Huai Automobile have signed a contract to jointly build commercial vehicles in China, according to Agence France-Presse (AFP).

Hyundai Motor reportedly plans to invest $US780 million dollars by 2010 in the joint venture plant which will eventually make 150,000 trucks and buses per year in Anhui, China.

“This project is part of our plan to secure an annual capacity of one million vehicles in China by 2008,” Hyundai said on Wednesday in a statement issued after signing a memorandum of understanding with the Chinese partners.

The South Korean carmaker reportedly said it expects huge demand for commercial vehicles in China where a series of large-scale infrastructure construction projects are under way or planned.

The Chinese firm has assembled the Starex, a Hyundai van popular among South Koreans, as part of a technology sharing agreement reached between the firms in February, 2003.

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Hyundai Motor has been aggressively expanding its presence in China.

Hyundai, which has already invested $350 million in a separate 50-50 joint venture in China with Beijing Automobile Industry Holdings, has vowed to invest an additional $740 million in it.

Once its investment program is completed, Hyundai will have an annual production capacity of 1.03 million units in China, AFP said.