Gasgoo.com (Shanghai February 15) - Lifan Holdings Industry is planning to invest 3.88 billion yuan ($617.53m) for a new automobile production site project in Chongqing's Liangjiang New Area, National Business Daily reported today. The project, which will be implemented by Lifan Motors, is immense for a manufacturer who owns less than 5 billion yuan ($794.77m) in net assets.

Construction on the new site, which will reportedly cover 880 mu, is scheduled to be take 18 months. The site will boast a production capability of 150,000 vehicles when construction is completed. Lifan hopes to expand its product line and market coverage with the new factory.

Lifan is traditionally a motorcycle manufacturer, with motorbike sales still constituting over 40 percent of its business. However, with more and more motorcycle manufacturers coming out, Lifan is hoping to further expand into the passenger vehicle market. Lifan manufactured 125,700 vehicles and sold 116,600 vehicles in 2011. By comparison, top manufacturer SAIC sold over four million vehicles last year.

"Lifan still requires a long period of investment," an unnamed industry analyst said, who emphasized the importance of the new factory to the manufacturer.

Lifan's performance this January has been relatively strong. The manufacturer made 6,790 and sold 6,338 vehicles during the month. The figures represent year-on-year growth of 74.77 percent and 18.16 percent, respectively.