Chery plans new assembly plant in Argentina

Shanghai, February 1 (Gasgoo.com) Chery Socma S.A., a joint venture set up by China's leading home-grown automaker Chery Automobile Co Ltd, Argentina's Socma Group and Oferol of Uruguay, will establish a new assembly plant in Chaco of northern Argentina, xinhuanet.com said today, citing Argentina officials.

Chery Socma said in a report that the new project will last for four years, with total investment of $450 million-$500 million, according to La Nacion newspaper.

The new plant will have annual capacity of 50,000 by 2011 and will reach capacity of 100,000 units by the end of 2012, said sources. Most of the products will be exported to Brazil.

According to Chaco officials, the local government will look into this project and lobby the state government to finance this plan. The Chaco government expects this project could create 2,000 jobs locally.

Chery Socma is the first automobile manufacturing facility by a Chinese company in South America, with investment of $12 million from three parties. The JV is targeting the market for SUVs and compact vehicles in South America's Mercosur countries, said sources. The plant has been in operation since March, 2008 with annual capacity of 20,000 units.

Reports said Chery Tiggo SUVs produced by Chery Socma have been put on sale in Uruguay, Argentina and other South American markets since early June last year and the excellent price/performance ratio has been well received by customers.

Argentina's auto industry, deeply affected by the global financial crisis, saw its vehicles output decline by 47.3% year on year to 26,720 units in Dec 2008, posting a 37.5% month-on-month drop. Automakers like Honda have postponed investment plans in Argentina.

A worker is checking a Chery vehicle in the assembly plant.