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China auto giant SAIC to launch new van

SHANGHAI, July 29 (Reuters) - China's third largest auto giant, Shanghai Automotive Industry (Group) Corp (SAIC), said on Monday it will begin mass production of a new van in October with annual capacity targeted at 20,000 vehicles.

The Sabre light passenger vehicle has a 1.6-litre engine and can carry both people and goods. It is built on the same technical platform as General Motors' Opel S4200, SAIC said in a statement.

SAIC declined to comment on the price, but a company source said the van would be sold for 70,000 yuan to 80,000 yuan ($8,457-$9,665).

Its statement said target markets inlcuded individual buyers in rural areas and small and medium-sized cities and corporate clients such as express delivery firms, government departments and repair companies.

China already has several van and minivan producers offering vehicles at prices ranging from 40,000 yuan to more than 100,000 yuan.

The biggest is a unit of Brilliance China , which has annual sales of about 63,000 vans.

Many auto producers have launched new cars this year in the increasingly competitive China market, where progressively lower import tariffs are spurring sales of foreign cars.

SAIC said it spent 350 million yuan on developing the Sabre and the first model came off the production line at its wholly owned unit, Yizheng Automobile Co, on Sunday. Mass production is scheduled to begin on October 28.

SAIC ranks third in China by sales, although it is the country's most profitable auto maker. It sells the most passenger cars in China through joint ventures with U.S. General Motors and Germany's Volkswagen AG

It has also invested in mini-van and mini-truck producer SAIC-GM-Wuling and owns a stake in compact car maker Chery Automobile Corp.

SAIC's listed unit Shanghai Auto primarily makes auto components. Its shares are reserved for domestic investors.

Yizheng Auto is based in the eastern province of Jiangsu, a booming manufacturing region neighbouring Shanghai.

"Yizheng is an important car plant for SAIC and the Sabre is only our first product. We may boost capacity depending on demand and launch other vehicles from this plant in the future," an SAIC spokesman said.