China's Chery Automobile Co will team up with its foreign partners to build a new plant in Argentina to increase production capacity by five-folds within four years.

 

Up to 500 million U.S. dollars will be invested by 2012 in the new plant which will be managed by Chery Socma, a venture between Chery, Argentina's Socma Group and Oferol of Uruguay, Xinhua news agency reported on Monday, citing the Argentinian government.

 

The factory will be able to turn out 50,000 vehicles annually by 2011. The production capacity will eventually rise to 100,000 units annually by 2012, most of which will be exported to Brazil, the state media added.

 

Asked about the reason for the investment against the backdrop of a global financial crisis, Chery spokesman Jin Yibo said Monday: "The project is supported by the local government because it is expected to help create jobs and boost the auto industry development in Argentina."

 

Argentina saw a 47.3-percent plunge in auto output in December to 26,720 units from a year earlier, forcing car makers, including Japan's Honda Motor Co, to delay plans for new plants, Xinhua said.

 

But some analysts believed that there is still room overseas for Chinese-branded vehicles which are price competitive.

 

Chery Socma, the 12-million-dollars venture, started production in Uruguay in March last year with an annual turnover of 20,000 units. It assembled and exported Chery's Tiggo sport utility vehicles to Argentina.

 

Chery, the nation's fourth-largest auto maker, 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.

 

It received a 10-billion-yuan loan (US$1.47 billion) from China's Export and Import Bank at the end of last year to fund its global growth.