Chery Auto plans to build $2.9B plant in north China

Shanghai, February 22 (Gasgoo.com) Chinese carmaker Chery Auto plans to invest 20 billion yuan ($2.93 bln) to set up a new plant in northern China's Inner Mongolia autonomous region, China Daily reported today.

Chery spokesman Jin Yibo has confirmed that the company and Erdos city of the region have been in talks. Judging by the reported large investment, analysts estimate that the Erdos plant could have an annual capacity of about 500,000 vehicles.

The homegrown carmaker based in central Anhui province started construction last month on a new 10 billion yuan production facility in its headquarters city of Wuhu after breaking ground for a 200,000-unit plant in the northeastern coastal city of Dalian in September 2009.

The company's annual production capacity, currently at 650,000 units, will be boosted to more than 1 million vehicles by early 2012 after the two new facilities now under construction go into operation.

Chery also plans a plant in central China's Kaifeng city to make 300,000 vehicles a year, mostly micro-buses and light trucks. The planned Erdos and Kaifeng projects will raise Chery's annual capacity to 1.8 million units.

Sales by Chery hit 500,000 units last year, up 40.5% year on year. The No. 1 independent Chinese automaker aims to sell 900,000 vehicles this year, with at least 17 new models to be launched.