China carmaker FAW Xiali to invest $386 million by 2010

SHANGHAI (Reuters) -- Tianjin FAW Xiali Automobile Co., Toyota Motor Co.'s China partner, plans to invest 3 billion yuan ($386 million) from 2007 to 2010 to boost its production capacity, an executive said today.

FAW Xiali, controlled by China's major vehicle maker First Automotive Works (FAW), competes with Geely Automobile Holdings Ltd. and others in the world's second-largest auto market where 5.18 million cars were sold in 2006.

"We plan to spend 3 billion yuan by 2010," the executive said, "We may raise money from the capital markets but have yet to work out detailed plans."

The company's expansion scheme includes a doubling of its annual vehicle production capacity to 400,000 units and the addition of a new engine assembly line, he added.

FAW Xiali, based in the northern city of Tianjin, near Beijing, makes its namesake compact car as well as the Vela and Vizi models.

Its net profit jumped 106 percent to 307.48 million yuan in the first nine months of 2006, helped by robust sales of its 30 percent-owned FAW Toyota -- the top Japanese automaker's tie-up with FAW.

To maintain growth momentum, the company would shore up its research and development capability and roll out more new models in the next few years, the executive added.

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