BEIJING – Chery Automobile Co., Ltd. and its foreign partners plan to build a new facility in Argentina to increase production capacity by five-folds within four years, Xinhua News Agency reported in February.
Up to $500 million will be invested by 2012 in the new plant which will be managed by Chery Socma, a joint venture between Chery, Argentina’s Socma Group and Oferol of Uruguay, said the media citing the Argentinean government.
Production capacity of the factory will be raised to 50,000 units by 2011, and eventually to 100,000 units annually by 2012, most of which will be exported to Brazil, the report added.
Asked about the reason for the investment against the backdrop of a global financial crisis, Chery spokesman Jin Yibo said: “The project is supported by the local government because it is expected to help create jobs and boost auto industry in Argentina.”
Argentina saw a 47.3-percent decrease in auto output in December to 26,720 units from a year earlier, forcing carmakers, including Japa’s Honda Motor Co., to delay plans for new factories, according to Xinhua.
But some analysts believed that Chinese-branded vehicles, which are price competitive, still have great potential in overseas market.
Chery Socma, a $12 million joint venture, started production in Uruguay in March last year with an annual output capacity of 20,000 units. It assembles and exports Chery’s Tiggo sport utility vehicles to Argentina.
Chery, a Wuhu-based independent brand automaker, has set up eight plants overseas to expand its presence in Southeast Asia, Latin America and East Europe. To achieve exports of 600,000 units by 2010, Chery said earlier that it aims to set up 14 overseas plants by then.
The company received a ¥10 billion loan ($1.45 billion) from China’s Export and Import Bank at the end of last year to fund its global expansion.
Affected by shrinking demand in overseas market, Chery sold a total of 356,088 vehicles in 2008, down 6.39 percent year-on-year, according to CBU-Autostats.