(Yicai) July 2 -- Yongmaotai Automotive Technology, a Chinese supplier of aluminum alloy car parts, said it plans to invest CNY450 million (USD63 million) building a new factory in Mexico to mitigate the impact of shifting global trade policies on its European and US customers' supply chains.

Yongmaotai Auto's two Singaporean units will jointly set up a Mexican project company to invest in the new plant and oversee its construction and operations, their Shanghai-based parent company announced late yesterday. The factory will likely take two years to build, it added, without disclosing further details.

The investment in Mexico will help reduce the adverse effects of changing international tariff policies on the supply chains of Yongmaotai Auto's clients in Europe and the United States, the firm noted. The move will also stabilize and strengthen ties with overseas clients and markets and encourage the use of its aluminum parts in the car sector.

In April, Yongmaotai Auto said it plans to invest USD50 million to build a turbocharger housing factory in Indonesia with an annual production capacity of about 5 million units. The motivation behind that investment was the same as that for the Mexican plant.

Yongmaotai Auto counts General Motors, Volkswagen Group, BorgWarner, Continental Automotive System's Brake Systems, and Robert Bosch or their Chinese joint ventures among its clients. Its overseas revenue reached CNY225 million (USD31.4 million) last year, accounting for about 5.5 percent of its total income, according to the firm’s annual financial report.

Shares of Yongmaotai Auto [SHA: 605208] closed down 1 percent at CNY13.27 (USD1.85) each today. The broader Shanghai Composite Index dipped 0.1 percent. The stock is still up 72 percent since the end of last year.

Editor: Martin Kadiev