Pelican Engineering is spending the cash on its fast-growing import business for Yutong vehicles, a Chinese-based commercial manufacturer which specialises in electric buses.
Demolition has already begun at the new site at Four Lane Ends in Castleford, with JOM Construction appointed as the main contractor.
Formerly a depot for Ryder Truck Rental, the site is undergoing a major redevelopment to transform it into a new 20,000sq ft facility, dedicated to fitting-out, commissioning and supporting new and used Yutong fully electric passenger vehicles supplied by Pelican.
Construction is due to be completed by November.
Pelican Engineering says the move will help meet the growing demand for zero-emission buses and coaches for local authorities and bus operators nationwide.
The new facility will enable Pelican to quadruple its capacity as well as creating at least another 10 jobs this year.
It will complement the group’s existing showroom on Altofts Lane which will continue to be used for some bus work and also as overflow space for Pelican’s nearby DAF dealership.
Richard Crump, managing director of Pelican Engineering, said: “In recent years, Pelican has seen huge growth in Yutong sales as more and more local authorities and bus operators transition to clean zero emission vehicles.
“From zero vehicles in 2014, we are now approaching 1,000 Yutong buses and coaches sold in the UK, and our new facility is needed to enable us to carry out the internal fit-out of the ever-increasing number of electric buses we are now supplying.”
“As a fourth generation Yorkshire family business with a heritage of over 100 years, we are proud to be continuing to invest in the region and further boosting the local economy."
Pelican Engineering was established in 1919 and has grown into a £43m turnover business, partnering with some of the world’s biggest vehicle manufacturers to supply leading edge commercial vehicles, coaches and buses.