Chery to invest $ 2.9 Billion to Expand Production Capacity

Chinese manufacturer Chery manufacture plans to invest over $2.9 billion to expand its production capacity, a development scheduled to be based in Ordos, Inner Mongolia Autonomous Region, North China, as Global Times writes.

Chery officials have confirmed that the carmaker has initiated talks to make a proposal to the Ordos officials after the investment plan had surfaced through local merchants. The government has already reserved a vat area for the carmaker’s project. Chery’s Dongsheng district equipment and manufacturing plant will be the base for the development.

The automotive producer has set a annual production capacity target of 2 million vehicles after the project is finished. This would more than triple Cherry’s 2009 production output, which reached 600,000 units. To sustain its ambitious plan, the carmaker will also inaugurate a production site in Dalian (this will produce 200,000 cars each year) and another one in Wuhu. These are the results of a $1.46 billion investment.

One of the company executives, who is responsible for the Ordos project, said that the authorities and Chery have negotiated twice. He added that the carmaker can finance the whole investment locally. However, he said that “there is no new progress at present, we will continue discussing the issue after the Chinese New Year,"

Earlier this month Chery announced that it plans to invest $35.2 million to build an research & development center in order to achieve its 700,000 units sales target for 2010. The carmaker will introduce 17 new models during the current year.