Beiqi Foton Motor, China's largest light commercial vehicle manufacturer, Wednesday said it will build a US$387 million plant in India to tap the vast market potential.
The plant, which will start production in July 2013, will have an annual capacity of 96,000 commercial vehicles in the first phase, according to Beiqi Foton's statement to the Shanghai Stock Exchange Wednesday. There are plans to raise output to 120,000 units in the future.
Beiqi Foton, which makes minivans, buses and heavy-duty trucks, sees the benefits of production in India as twofolds - an opportunity to tap soaring demand there as well as helping the firm boost its overseas business.
The company said there is huge market potential for commercial vehicles in India given the strong economy, improving infrastructure and development of the logistics industry. The firm also sees a higher emission standard speeding up market growth.
"The market environment in India is what it was like in China 10 years ago, and the market potential is enormous," the statement said.
India is the world's fourth-largest commercial vehicle market with auto imports averaging US$3 billion per year, which has attracted major commercial vehicle producers, including Daimler AG and MAN AG. Last year, China's SAIC Motor Corp said it would team up with General Motors to export Wuling minivans to India at end of this year.
Beiqi Foton is boosting cooperation with foreign partners and looking to expand overseas after domestic sales took a hit.
Its sales in the first half of this year fell 3.5 percent year on year to 357,975 units.
