(Yicai Global) Aug. 19 -- Shares of Great Wall Motors surged after the increasingly popular Chinese carmaker abroad said it will acquire Daimler's factory in southeastern Brazil to increase its production in South America.

GVM [SHA: 601633] climbed as much as 7.6 percent to CNY58.5 (USD9) intraday.

The plant in Iracemapolis, including 1.2 million square meters of land, buildings, and equipment, will be transferred to GWM, the Baoding-based firm said in a statement on its WeChat account yesterday, without disclosing the price.

Daimler confirmed the acquisition yesterday. It closed the factory that was making Mercedes-Benz C-Class compact executive cars and GLA-Class sport-utility vehicles last December due to economic difficulties in Brazil and the worsening Covid-19 pandemic.

GWM plans to turn the facility into one of its global smart production bases to cover the markets of Brazil and other countries in South America, the company added.

Brazil is an important overseas market for GMV, said Vice President Liu Xiangshang. The most populous country in Latin America has the highest economic strength in the continent, is No. 7 in global automobile sales, and provides great potential in auto consumption, Liu added.

The transfer is expected to be completed by this year. The plant will be able to make 100,000 vehicles per year after renovation while creating nearly 2,000 local jobs.

Expansion

The major Chinese SUV maker has been expanding over the past two years amid rising sales. It kicked off production at a new plant in Russia’s Tula in 2019. Moreover, it acquired a plant from General Motors in Thailand last November.

GWM sold more than 12,400 cars abroad in July, up nearly 98 percent from a year ago, according to public data. From January to July, overseas sales almost tripled to 74,110 units, making up more than 10 percent of its total.

Established in 2016, the factory in the state of Sao Paulo could produce about 20,000 Mercedes-Benz cars per year earlier. The German auto giant had been prepared to invest BRL600 million (USD111.5 million) to get the plant up and running.

GWM has a small factory in Ecuador, supplying products to other South American countries, including Uruguay, Peru, Bolivia, Paraguay, Argentina, and Chile. Chile is GWM’s biggest market in Latin America and its sixth-largest market in the world. The Chinese firm sold more than 2,400 vehicles in Chile last year.

Editor: Emmi Laine