BYD and the southern Chinese megacity of Shenzhen signed a strategic cooperation agreement Friday to invest RMB 5 billion ($770 million) in a parts factory, the Shenzhen Economic Daily reported.

The plant will be mainly used for the research and development, production, and manufacturing of core products such as auto parts and related supporting industries, the report said.

The project will cover an area of nearly one square kilometer and will be built in two phases, with an annual output value of about RMB 10 billion when it is all completed and in production.