FAW Car to invest 1b yuan to develop new minivan

Gasgoo.com (Shanghai October 30) - FAW Car announced today that it will be investing 1.01 billion yuan ($161.19m) to develop a new luxury minivan model, Shanghai Securities News reported. The announcement comes on the heels of FAW Car's decision to invest 4.3 billion yuan ($684.25m) to construct a new energy production site in August.

According to the announcement, the project, which is codenamed D021, will be entirely independently funded. The project will last 32 months. FAW Car expects to make a return on its investment within seven years.

Representatives from FAW Car claim that the new project will help the manufacturer fill yet another gap in its product line. After completion, the manufacturer should be able to produce 20,000 minivans annually.

FAW Car also announced specifics regarding its financial performance this quarter. From January to September, the manufacturer received 18.13 billion yuan ($2.88b) in total business returns. It was still in the red though, with its net deficit for the three quarter period confirmed to be 311 million yuan ($49.49m). The manufacturer attributes the deficit to poor sales and increasing competition, which has forced it to reduce its prices and cut down on its overall profit margin.