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Chery launches northeastern plant

By Song Hongmei (China Daily)
Updated: 2009-11-02 07:40

Local government leaders and heads of the Chery officiate at the foundation-laying ceremony of the company's new production base in Dalian on Sept 28 this year.[China Daily]

Chery Automobile Co, the largest wholly Chinese-owned carmaker, plans to build a 4.7 billion yuan ($688.3 million) plant in the port city of Dalian in northeast China's Liaoning province. The new facility will manufacture vehicles for both the domestic and overseas markets.

Covering an area of 1.2 sq km in the Dalian Bonded Area, the new plant is Chery's first domestic facility outside its home base in east China's Anhui province. It will go into operation in June 2011 with an annual production capacity of 200,000 vehicles.

Yin Tongyue, the president of Chery, said: "This new facility in Dalian is a crucial part of our development strategy. It is designed to meet the challenge of increasing investment by global brands in China and the fierce competition in what is now the world's most robust car market."

The company believes that Dalian's geographic advantages will give it access not only to the lucrative northeastern Chinese market, but also to the whole in North China, including Beijing, Tianjin, Hebei and Shanxi.

Dalian has been targeted as it is one of the largest ports in China, with substantial container and car carrier dock facilities.

Yin said: "Building a plant in a port city will greatly reduce our export logistics costs. This will give Chery a competitive edge when exporting to other countries."

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Dai Yulin, deputy mayor of Dalian, believes the city will provide a supportive environment for Chery's plant in the bonded area. He said: "I am confident that Chery will continue its rapid, yet steady, development. Its presence in the Dalian Bonded Area is a testament to our geographic advantages and incentive policies."

The Dalian Bonded Area has targeted the automotive and spare parts manufacturing sector as its key development area in recent years. "Last year, the bonded area set up a dedicated agency to promote its benefits within the automotive sector. This new agency has now visited more than 30 domestic carmakers, as well as the Chinese branches of multinational companies, to present the area's development strategy and attract further investment. Chery's move to the bonded area is the first fruit of this initiative," said Lu Lin, director of the area's administrative committee.

Chery currently has an annual production capacity of 450,000 vehicles and engines at its plant in Anhui. It is aiming to increase its output to one million units by 2012.