Foton to build truck plant in Sichuan for bigger market

Shanghai, October 9 (Gasgoo.com) Chinese truck maker Beiqi Foton Motor Co signed a strategic agreement on October 8 to build a new factory with the government of Deyang city in the southwestern province of Sichuan, reported China Business News today.

Beiqi Foton said the factory, with an investment of 800 million yuan ($117 million) will make light trucks as well as trucks used in civil engineering, and will have an annual capacity of 100,000 vehicles. Construction of the plant will kick off at the beginning of 2009.

After it is built up, the Deyang factory will become Beiqi Foton's only one manufacturing facility in southwestern China and will expand the truck maker's growth in the light truck market of the vast region. In addition, this facility will also considerably reduce the costs of human resources, materials, premises and logistics for the company.

Beiqi Foton now has an annual output of 400,000 light trucks, which are manufactured in Chucheng (Shandong province of eastern China), Beijing (northern China), Changsha (Hunan province of central China) and Nanhai (Guangdong province of southern China). The current light-truck makers in southwestern China are Yunnan Hongta and Chongqing Lifan, both of whom can not compare with Beiqi Foton in terms of capacity and market share. 

In 2007, Beiqi Foton's light truck sales rose 11% to 319,000 units, representing 28.9% of China's light truck market, and in the first half of 2008, the company's light truck sales grew by 18% y/y to 200,589 units.

The Deyang city government said that the cooperation with the light truck maker Beiqi Foton is expected to generate annual revenues of 4.5 billion yuan for local companies of auto parts and relevant products.