Beijing Automotive Group signed a deal with local government authorities on Oct 26 for the creation of a new automobile industrial base in an autonomous prefecture of Yunnan province.

According to the agreement with Yunnan Jingcheng Group Co Ltd, the vehicle manufacturer will invest 3.6 billion yuan ($592 million) in the construction of the industrial base, which will take place in two phases.

The first phase of the project will come into operation in 2015, and will mainly produce commercial vehicles and sports utility vehicles.

Once the second phase has been completed, the facility will work at an optimal production capacity of 150,000 vehicles annually.

A representative from BAIC Group declined to disclose further details of the industrial base's development.

In the first half of 2013, BAIC Group sold more than 1 million vehicles. Its sales exceeded 125 billion yuan over the same period with profits surpassing 8.1 billion yuan. That put sales up 34.5 percent on the same period last year, and profits up 18.6 percent.

It predicts a sales volume in excess of 2 million vehicles this year, an increase on the figure of 1.7 million in 2012.

The signing of the Yunnan agreement will not only expand the industrial base of BAIC Group, but also expedite its international expansion strategy. The group currently has five industrial bases around the country, partly as the result of acquisitions and mergers.