Chinese carmaker Chery Automobile plans to raise its annual output to one million vehicles by 2010, according to company sources.

The 10-year-old company, based in the eastern Chinese city of Wuhu, is expected to increase its production capacity by 200,000 vehicles to 700,000 this year.

Chery, an ambitious flag-bearer of Chinese indigenous brands, became the country's fourth largest producer of passenger cars in 2006, with sales of 305,200 vehicles, up 62 percent from the previous year.

The company held a 7.2 percent market share in China last year, up from 6.7 percent in 2005.

US Chrysler Group, which signed a deal last week to sell the Chery cars to North America and Europe, would select four to six compact models developed by Chery for exports under Chrysler Group brands.

Sales in North America and Europe are expected to reach 300,000 to 500,000 vehicles in 2019.

The first car exported - based on the Chery A1 compact model - will be sold under the Dodge brand. Chery said it had received more than 10,000 orders for the A1 by the end of May, which made its debut at the Shanghai auto show in April this year.

Chery also plans to set up a joint venture with Quantum LLC, a U.S. subsidiary of Tel Aviv-listed Israel Group, an Israeli company, in its attempt to explore the European and US markets.

Once approved by the Chinese government, the 5.8 billion yuan (US$743.6 million) joint venture will start production in 2009, rolling out 105,000 sedans and 45,000 sport-utility vehicles (SUVs) a year.

Despite its fast growth, Chery is still far from becoming one of the global auto giants that produce an annual average of two million vehicles, said a company executive.

Last year Shanghai Automotive Industry Cor., a partner of General Motors and Volkswagen AG, was China's largest automaker in terms of sales. It sold 1.34 million vehicles, including 915,000 passenger cars.