(Yicai Global) Feb. 7 -- Dongxu Optoelectronic Technology Co., traditionally a Chinese component maker, will invest CNY3 billion (USD477.5 million) in a new factory in Suqian, eastern Jiangsu province to produce new energy vehicles, as part of efforts to tap the country's fast-growing electric-car market.
The Beijing-based firm will start construction of the plant's first phase this year, which will produce 5,000 new energy passenger vehicles annually once complete in 2019 or 2020, the company said in a statement.
Dongxu's plans for the plant's second phase, which would produce 50,000 new energy logistics vehicles per year, are dependent on the firm's future capital situation.
The company made its first foray into the transport sector last year when it completed the CNY3 billion acquisition of Shanghai Sunlong Bus Co., the country's 8th biggest passenger vehicle maker in the first half of 2017 in terms of sales (CNY1.13 billion).
The new plant marks the firm's second major investment in production capacity. Dongxu announced intentions to build a USD454 million NEV factory in Mianyang in western Sichuan province, in November last year. Similar to the Suqian plant, the facility will produce both passenger and logistics vehicles.
China's fast-growing NEV sector continues to attract vast amounts of investment among traditional carmakers and new industry entrants. Sales of passenger NEVS in the country reached 556,000 units last year, up by 70 percent annually. Sales in China made up nearly 50 percent of the global total and the sector's rapid growth is sending conventional fuel vehicle businesses into a sales decline.