June 12, 2015 / 3:01 PM / 3 years ago

China's Guangzhou Auto to invest $322 mln in electric car factory -executive

GUANGZHOU, China, June 12 (Reuters) - Guangzhou Automobile Group Motor plans to invest 2 billion yuan ($322 million) in a factory in China that will exclusively build green “new energy” vehicles, a senior executive said on Friday.

Chinese carmakers are rushing to market with new energy vehicles - electric cars, hybrids and fuel cell vehicles - to meet fuel economy standards that grow increasingly strict each year to 2020, part of the government’s effort to tackle pollution that chokes many major urban areas.

Guangzhou’s new factory will have an annual production capacity of 100,000 vehicles and is slated for completion in 2018, although that timetable may be accelerated depending on sales of new energy models, Vice General Manager Liang Weibiao said in an interview on Friday.

The company, a subsidiary of Guangzhou Automobile Group , produces own-brand cars.

Liang, who oversees sales and several other departments, declined to say where the factory will be located.

“Many places ardently want us to build there. There are some that, in order to get us to build locally, make known that they are now thinking of buying a large quantity of our products,” he said.

Guangzhou Automobile Group Motor aims to sell 3,000 new energy vehicles this year and targets 10,000 in 2016, producing only as much as there is demand for, Liang said.

It currently sells hybrid and range-extended electric versions of its GA5 sedan, with a hybrid version of the GS4 SUV set to hit the market next year, he added.

Both domestic and global automakers are continuing to plough money into factories in China, the world’s largest car market, despite the biggest economic slowdown in a quarter of a century crimping sales growth.

Guangzhou Automobile Group Motor head Wu Song told Reuters in April that it separately plans to build two factories in 2016 and 2018, each with a capacity of 200,000 units.

Chinese auto sales contracted year-on-year for the second consecutive month in May, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.

CAAM said in March that sales growth this year could be slower than the 6.9 percent growth in 2014.

$1 = 6.2081 Chinese yuan renminbi Reporting by Jake Spring; Editing by Pravin Char

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