The Chinese automaker BYD Auto Co plans to build a car-parts manufacturing facility in Vietnam.

The move is part of the company’s aim to minimize its reliance on China and enhance its Southeast Asian supply chain. Reuters said that the investment in northern Vietnam will be larger than $250 million. This will expand the parent company’s presence in Vietnam, where its electronic division makes solar panels.

To construct the factory, the business seeks to lease 80 hectares of industrial property. According to sources cited by Reuters, discussions are already underway to select a location for the Vietnam production. It is anticipated that construction will commence by the middle of the year.

After completion, components will be sent to a proposed assembly factory in Thailand. The Vietnam-based firm will also provide maintenance services and spare parts for Chinese-imported BYD cars for the local market.

BYD intends to boost capacity, control prices, and diversify its production operations away from China, where demand has been high.

As a result of the trade dispute with the United States and the production disruption created by China’s Zero-COVID policy, an increasing number of firms are accelerating their move out from China.