By Jiahui Huang

Chinese automaker Geely Automobile is investing almost $170 million in Vietnam to manufacture vehicles in the Southeast Asian country, part of the company's efforts to expand overseas.

Geely said Tuesday that it has signed a joint venture agreement with Hanoi-based Tasco Joint Stock company to produce and assemble cars in Vietnam. The collaboration also allows construction and engineering company Tasco to distribute the Geely Auto brand in the country.

The plant is set to have initial capacity for 75,000 vehicles, which will go to the domestic market and be exported to countries that have free-trade agreements with Vietnam, the companies said in a statement.

Tasco will contribute 64% of the roughly $168 million investment, with Geely putting up the remainder of the capital.

The companies expect to break ground on the plant in the first half of 2025, with the first vehicle delivery slated for early 2026.

Geely will also establish a research and development center in Vietnam and invest in building a local supply chain, according to the statement.

Geely's continued push abroad comes as Chinese automakers face intensifying pressure from the U.S., Europe and other countries who are either raising or planning tariffs on China-made cars.

The company has been speeding up its overseas expansion this year including to major markets such as the Middle East and Eastern Europe. In the first half of this year, Geely's exports sales rose 67% to 187,428 units.

Geely in August raised its annual sales target to 2 million units from 1.9 million units, after its first-half profit soared to 10.60 billion yuan from 1.57 billion yuan in the year-earlier period.

Geely shares closed 4.1% higher in Hong Kong.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

September 24, 2024 05:08 ET (09:08 GMT)

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