Chongqing Changan Automobile has signed an agreement with Kunming municipal government to invest Rmb10bn in an auto production base in Yunnan province. The company said in a statement that the base is expected to have an annual production capacity of 400,000 cars and 1.2m engines.

Chongqing Changan has yet to decide on the model to be produced in Yunnan, but according to an insider it will manufacture diesel-powered vehicles, which is in line with Changan’s future development strategy.