China's FAW Car to invest $300 mln in auto projects

SHANGHAI, April 2 (Reuters) - FAW Car 000800.SZ, a unit of
Chinese auto maker FAW Group Corp, said on Wednesday it planned
to invest 2.1 billion yuan ($300 million) in three projects to
boost its capacity and competitiveness.

FAW Car will spend 1.4 billion yuan to revamp its assembly
lines to produce Mazda Motor Corp's (7261.T) Mazda 6 and its own
internally developed sedan, the B131, it said in a statement.

The investment would enable it to produce 60,000 Mazda 6
sedans a year by the end of this year and 80,000 B131 models
annually in 2010, it said. It provided no comparative figures.

FAW Car, maker of Red Flag cars once favoured by top Chinese
Communist Party leaders, will also build a 695.47 million yuan
engine plant, nearly doubling its engine capacity to 90,000 units
from 50,000.

In a separate statement, the firm said it would also invest
an additional 428.8 million yuan in an auto financing subsidiary,
raising its stake to 21.75 percent from 20.70 percent.

Many Chinese auto makers are speeding up expansion to meet
brisk demand growth in China, the world's second-largest auto
market, where car sales grew 21.68 percent to 6.30 million units
last year.

FAW Group, a local partner of Volkswagen (VOWG.DE) and Toyota
Motor (7203.T), said in July 2007 it would invest a total of 13
billion in the next eight years to develop vehicles carrying its
own brand.

FAW Car also said on Wednesday that its 2007 net profit
doubled to 552.87 million yuan. (For details click
[ID:nSHA344696])

The company's shares rose 1.26 percent in morning trade to
12.10 yuan, compared with a 3.78 percent rise in China's
benchmark index .SSEC.
($1=7.011 Yuan)
(Reporting by Fang Yan; Editing by Edmund Klamann)