Under Hyundai's agreement with Ziyang Nanjun Automobile Co., the partnership will receive an initial investment of 3 billion yuan ($450 million), according to the Ziyang city government.

The privately held Nanjun Automobile makes buses and light-duty trucks. The company, which is located in Ziyang of Sichuan province, sold 74,000 vehicles worldwide last year.

The new venture will produce a full range of commercial vehicles, including some alternative-energy vehicles, according to the city government.

Initially, the partners will produce up to 200,000 Hyundai-brand commercial vehicles a year. The plant's capacity will rise to 400,000 units by 2017 and 700,000 units by 2020, according to the local government.
Hyundai currently has no commercial truck assembly plant in China. In 2004, the Korean automaker signed a technical cooperation agreement with Anhui Jianghuai Automobile Co. that allowed the latter to build a Hyundai-brand commercial MPV. That venture ended in 2009.

In the first nine months of 2010, sales of buses, trucks and other commercial vehicles in China increased 26 percent year-on-year to 3.9 million units, according to J.D. Power and Associates.

In China, Hyundai is the third largest international automaker, trailing Volkswagen AG and General Motors Co. In the first nine months, Hyundai's group sales totaled 788,800 units.

In 2004, the Korean automaker signed a technical cooperation agreement with Anhui Jianghuai Automobile Co. allowing the latter to build a Hyundai-branded MPV. But the cooperation stopped in 2009. It currently has no commercial vehicle production facility in China.