Truck-maker Shaanxi Auto goes south for growth

SHAANXI Automobile Group Co Ltd said it plans to invest 1 billion yuan (US$140 million) to build its first manufacturing facility in the south of China to make self-developed medium and heavy-duty trucks.

The move underscores the latest efforts by the nation's 10th biggest commercial vehicle maker to narrow the gap on bigger rival Beiqi Foton and build a nationwide presence when the economy boom spurs sales of China's commercial vehicles.

Shaanxi Auto, headquartered in the capital city Xi'an of Shaanxi Province in west China, said the new factory would be able to produce 25,000 trucks per year and gain a sales revenue of 5 billion yuan when it is completed in 2012. Shaanxi Auto now has a production capacity of 100,000 units.

Located in Changsha, in Hunan Province, the new facility would also help the truck maker to expand its presence from the west to the south of the nation, Zhang Yupu, chairman of Shaanxi Auto said.

Shaanxi Auto is joining a slew of commercial vehicle makers to expand production and sales network nationwide to meet rising demand.

Last year, sales of China's commercial vehicles climbed 22.25 percent to 2.49 million units, outpacing the overall vehicle market.