GUANGZHOU: Guangzhou Automobile Group has recently started building a massive R&D and production base in the city's Panyu District.

Spread over 1.5 million square meters, the base involves a total investment of 6.8 billion yuan, 3 billion yuan of which will be for the R&D facilities and 3.8 billion yuan for the production facilities.

The R&D base will be responsible for the R&D work of automobile firm's self-owned brand products ranging from engines, gear change mechanism to vehicles.

The production base aims at yielding 100,000 vehicles and 100,000 engines annually at the initial stage of the project, and 200,000 vehicles and 250,000 engines annually when fully operational.

"Construction of the R&D and production base marks a milestone of our firm's R&D and self-owned brand vehicle developments," said Zhang Fangyou, chairman of Guangzhou Automobile Group.

"Via the close co-operations with Honda and Toyota, our group has built up rich human resources in the manufacturing technology and management," he said. "Greater efforts for R&D as well as for the development of self-owned brand products alongside with fortified co-operative relations with our foreign partners will be strategically meaningful for the sustained development of our group as well as of Guangzhou's automobile industry."

He said the first middle-to-high-end car bearing the enterprise's own brand will come out by 2010, targeting both domestic and overseas markets.

Together with the brands of its joint ventures, he said, the firm aims at achieving an annual production capacity of 1.1 million cars and 230,000 million commercial vehicles including trucks and passenger vehicles of different sizes.

At a forum on China's automobile development during the ongoing Auto Guangzhou 2007, which opened on Tuesday, Guangzhou Vice-Mayor Chen Mingde said that the city would forge closer ties with foreign automobile firms not only in production and R&D, but also in the automobile service sector, while encouraging local automobile enterprises to beef up R&D efforts for self-owned brands.

"The efforts are expected to help Guangzhou cement its position as one of the nation's top three bases for automobile production as well as one of the nation's few bases for export-oriented vehicle production.

Citing statistics, the vice-mayor said, Guangzhou assembled 5.49 million cars in 2006, ranking the second in the country; and the city exported 55,300 cars last year, occupying the top position.

The city exported 51,200 cars worth US$370 million in this year's first three quarters and aims to realize exports of vehicles and components worth US$1.8 billion by 2010.

(HK Edition 11/24/2007 page6)