Japanese automotive supplier Denso Corp. will invest no less than 2 billion yuan (290.3 million U.S. dollars) to build a plant in Nansha District of Guangzhou, capital of south China's Guangdong Province, sources with the district said Monday.

Covering about 100,000 square meters, the plant will consist of auto parts manufacturing workshops, a quality monitoring center, and warehousing and distribution center to produce auto electronic components upon completion, according to an agreement signed between the management committee of the Guangzhou Nansha economic and technological development zone and Denso (Guang Zhou Nansha) Co. Ltd.

The construction on the project, located in Huangge Township, will start on June 28. It is expected to become operational in 2021 and achieve mass production in 2022.

Yoshitaka Kajita, president of Denso(China) Investment Co. Ltd., said that despite the recent decline in China's vehicle market, China was still a very large and important market in the medium and long term. Therefore, the company had decided to invest more in Nansha District to meet the needs of the market and customers.

The new plant will expand its capacity and focus on designing new products for the development of new energy vehicles and intelligent network vehicles.

Cai Chaolin, Party chief of the Nansha District, said that in recent years the automobile industry has developed to be one of the pillar industries of Nansha District, with total output value of automobile manufacturing and related industries exceeding 100 billion yuan.

The district government will fully support the new plant project, Cai said.

Denso is a world-renowned automotive parts and systems supplier. Its subsidiary Denso (Guang Zhou Nansha) Co. Ltd., was established in 2004 in Nansha District of Guangzhou, mainly engaged in the production and management of engine control systems, filters, horns, chassis control systems and equipment, and molds.