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General Motors Corp inaugurated a new engine plant at its minicar factory SAIC-GM-Wuling Automobile Co in southern China on Monday.

The 2 billion yuan ($263 million) new engine plant, adjacent to the factory in Liuzhou, South China's Guangxi Zhuang Autonomous Region, will have a capacity of 300,000 units a year and begin production of 1.1-liter and 1.2-liter engines in August, GM said in a statement.

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The new engine plant will facilitate new product development at the minicar factory, which now buys engines and related parts from outside suppliers, the company said.

The engines will be used first in a new minivan model, the Wuling Hong Tu, a vehicle developed by GM's Pan Asia Technical Automotive Center joint venture in Shanghai with SAIC.

SAIC-GM-Wuling Automobile Co is a three-way commercial vehicle joint venture between GM, Shanghai-based partner SAIC Motor Corp, and Guangxi province-based Wuling Automobile Co GM owns 34 percent of the venture, SAIC has 50.1 percent and the remainder is held by Wuling Automobile.

In the first quarter, SAIC-GM-Wuling Automobile's unit sales rose 27 percent from a year earlier to more than 160,000 vehicles, SAIC Motor reported.

SAIC-GM-Wuling sold 460,155 vehicles in 2006, making it the biggest minivehicle producer in China.

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