Gasgoo.com (Shanghai March 2) - Having receiving $3.2 million in financial aid, Dongfeng Motor's Thai branch announced this week that they will build their first automobile production site in the country, Economic Observer News reported. Dongfeng Thailand hopes the new site will be a major production center for commercial vehicles in Southeast Asia, with Laos, Myanmar, Cambodia and Malaysia among the target markets.

Dongfeng Thailand signed an agreement with Kasikornbank to borrow 106 million baht ($3.2m) in financial aid to pay for the new site, which will be located in Chachoengsao province, close to Bangkok. Preliminary construction at the site has already begun, which is expected to have an annual production capability of 5,000 vehicles. Dongfeng Thailand's key market in the country is for light commercial vehicles.

Dongfeng currently exports pickup trucks and other commercial use vehicles, as well as SUVs, to Thailand. The manufacturer hopes the new site will help decrease costs and increase sales of its models in the country, as well as promote exports to other Southeast Asian nations.

Several Chinese manufacturers have begun pouring into Thailand in recent years. Statistics show that Chinese vehicle exports to Thailand in 2011 totaled 3,209 units, a 52 percent increase from the previous year. In that year Chinese imports accounted for 0.4 percent of all Thai vehicle sales. 2,000 Dongfeng branded vehicles were sold in the country last year. That amount is expected to hit 3,000 units in 2012 and grow to 10,000 within the next three years.