Hunan Liebao Automobile Co Ltd is planning to set up its first overseas facility in an ASEAN country in 2018, a move to facilitate its expansion in Southeast Asian markets, according to the company's chairman.
Chairman Liu Kanglin said: "Now the time is right for us to seek opportunities abroad, and ASEAN countries will be our first step toward the international market."
The three-year-old automaker expects to double its sales this year, building on last year's strong performance, Liu told a group of 20 journalists from Association of Southeast Asian Nations member states on a visit to the company in Changsha, Hunan province, which was organized by the ASEAN-China Center.
Southeast Asia, thanks to its large population and immense growth potential, is considered an attractive investment destination for automakers worldwide.
Industry data showed that ASEAN economies will be in demand for at least 4 million new vehicles annually by 2020, as regional free trade deepens.
The company has already made its vehicles available in Malaysia on a test basis, after reaching a business agreement with a Malaysian partner. The official launch of its products in Malaysia will be before the end of this year, Liu added.
Oliver Tonby, an analyst at consulting firm McKinsey & Co, wrote in a report that cost optimization is a key factor for automobile companies to locate their operations.
"Companies must balance low manufacturing costs with overall supply chain costs such as transportation and components supply," Tonby wrote.
Liebao set out the ambitious plan to expand in Southeast Asia as it has made remarkable achievements in the domestic market.
In the first quarter of this year, both its sales and revenue increased by more than 50 percent year-on-year. In 2016, it raked in revenue of 8.58 billion yuan ($1.25 billion). Its profit amounted to 600 million yuan.
The company has total assets in excess of 1.46 billion yuan, and it has more than 5,700 employees.