NANJING - Shanghai Automotive Industry Corp (SAIC), China's largest carmaker, agreed on Friday to more than triple its annual production at its subsidiary in the eastern city of Nanjing to one million units within five years.
SAIC Group, a partner of Volkswagen AG and General Motors, signed a memorandum of understanding with the city government of Nanjing, capital of Jiangsu province, pledging to invest 10 billion yuan ($1.5 billion) for the expanded production.
The expansion would drive annual auto sales to 100 billion yuan ($15.1 billion) at the Nanjing Automobile (Group) Corp, which was taken over by SAIC in December 2007, the company said in a statement.
Nanjing Auto is expected to produce and sell nearly 300,000 motor vehicles this year, it said. The figure is twice as high as that in 2007, helping Nanjing Auto's finances return to the black.
Nanjing Auto outbid SAIC to acquire the bankrupt British carmaker MG Rover Group and its engine producer, Power Train Ltd, in 2005. SAIC, however, bought the technology for two Rover models and their engines from MG Rover in 2004.
SAIC now produces the MG and Roewe series based on MG Rover's technology. SAIC sold about 3.3 million passenger cars and commercial vehicles in the first 11 months of 2010, up 35 percent from one year earlier, it said in a statement on its website Monday.