This is a great way to build out when your city is growing like mad. I think China and Russia have seen and still see a lot of development like this.

Eventually you end up with a dense city when you need to upgrade or replace a building in a constrained environment (think NYC or London or Tokyo), you have very different limitations and technology.

After WWII there was a big boom in houses made that way in the United States too but then homebuilders were able to get legislation passed so that "a small manufactured house is disfavored because it’s mobile like a vehicle but it is also required by law to be mobile like a vehicle" and the problem for them went away.

https://www.slowboring.com/p/trailer-regulation

Are the factories mobile and/or relocatable to reduce transport costs; and/or are the neighbourhood location requirements somewhat specific (e.g. flat stable land, good road access etc)?

You rarely get to build a new neighbourhood here, often it's renovation work done on already built areas. Building a whole new block all the time is simply unsustainable.