(Yicai) Jan. 14 -- Chinese car parts supplier Xinzhi Group intends to invest up to CNY1 billion (USD136.4 million) to build a production base for new energy vehicle parts in Hungary.

Located in an industrial park owned by Hungarian State-Owned National Industrial Park Management and Development in Heves county, Hungary, the new factory will have an annual output capacity of one million NEV drive motor stators and rotors, the Zhejiang province-based company announced yesterday.

The project will be built in phases based on the planning, downstream demand, and funding, with production expected to begin by 2027, Xinzhi noted, adding that there are approval and operational management risks because of significant differences between Hungarian laws and the Chinese business environment.

Building a production base in Europe will help Xinzhi meet the demand from local customers, further expand overseas, and enhance its competitiveness in the international market, the firm said.

Xinzhi’s shares [SHE: 002664] were trading down 0.4 percent at CNY14.95 (USD2.04) as of 11.10 a.m. in Shenzhen today, after surging 6.1 percent yesterday.

In the first three quarters of 2024, Xinzhi reported revenue of CNY4.5 billion and a net profit of CNY87.1 million (USD11.88).

Editor: Futura Costaglione