A new engine plant, cooperatively run by Volkswagen of Germany and China's First Auto Group, was officially opened Thursday in Dalian, a coastal city in northeast China's Liaoning Province, according to a municipal source.

The project, with a total investment of 150 million euros, is expected to develop an annual production capacity of 150,000 engines under the first-phase target, with planned final annual production capacity topping 300,000 engines, the source said.

It was regarded as a "milestone" cooperation project by the two sides, which started cooperation in 1990 and turned out to be one of China's best Sino-foreign joint ventures.

The on-going project will undertake mainly the production of spare parts and assembling of engines, the source said, adding that the Chinese-made materials will amount to about 70 percent in the first-phase production.

The engines to be produced by the joint venture will be highly competitive in world markets in terms of price, oil-saving and environmental protection, the source added.

Source: Xinhua