FAW to invest $300 mln in three auto-making projects

Shanghai, April 2 (Gasgoo.com) China's auto-making giant FAW has announced its plan to invest RMB 2.1 billion ($300 million) in three projects to boost its capacity and competitiveness in the country's automotive industry, the state media said on Wednesday.

About RMB 1.4 billion will be earmarked for the revamping of its assembly lines which produce Mazda Motor Corp's Mazda6 and FAW's self-developed sedan, the B131. FAW's capacity will be boosted by the investment to produce 60,000 Mazda6 units annually by the end of 2008 and make 80,000 B131 models a year in 2010.

Faw will also build a RMB 695.47 million engine plant, almostly doubling its engine manufacturing capacity to 90,000 units from the current 50,000 units. Another statement of the carmaker said it would also invest an additional RMB 428.8 million in an auto financing center to increase its stake from 20.70% to 21.75%.

China's auto industry is expanding rapidly to meet the growing brisk demand in the country. As the world's second-largest auto market, China saw its car sales grow by 21.68% to 6.30 million units in 2007. FAW also said on Wednesday that its 2007 net profit doubled to RMB 552.87 million.

FAW, short for New China's traditional "First Automotive Works," made the prestigious "Red Flag" sedans once favored by top Chinese leaders three decades ago. And now the Chinese vantage carmaker has a joint venture with Volkswagen and Toyota Motor --  the FAW-VW Automobile Co., Ltd. FAW has pledged to invest multi-billion dollars in the next few years to develop its own brand vehicles.