China's Changan Automobile Company is reportedly planning to establish a factory in India in the next financial year, according to reports. 

The speculation comes as China's auto market is nearing stagnation and price competition has intensified. If the alleged plan pushes through, this will be the first time for a Chinese carmaker enters the Indian market.

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The new facility would reportedly require about Rs 1,000 crore during its initial phase, according to sources familiar with the matter, the Business Standard reported. Furthermore, the sources said that initially, the manufacturing plant will produce 200,000 units and its capacity would gradually expand.

Insiders also revealed that the Chinese firm wants to keep their suppliers within reach, giving hints that the new production site would be situated at Tada (in Andhra Pradesh) near the Pradesh-Tamil Nadu border in Chennai. Tada's Sri City is progressively turning into a manufacturing hub.

Meanwhile, Changan has declined to comment about the alleged plans. However, sources from both state governments have confirmed that representatives from Changan's head office had indeed visited them.

Changan, which is the oldest automobile maker in China, is good at making basic, no-frill cars in the sedan and SUV models. Among its popular units are Alsvin, Benni, CX20, CS35, and CS75.

In China, the company has teamed up with Ford, Suzuki, and PSA Peugeot Citroen. An official revealed that the company is looking for other potential venture partners.

The Chongqing-based firm claims to have 6,000 sales and service facilities across over 60 countries worldwide. It has six production sites across China and four research and development facilities at Italy, Japan, England, and the United States.

TagsChangan Automobile, India, china, automobile industry