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Chinese Manufacturers Consider Expansion into Russia

5th July 2005

Today’s edition of the China Daily reviews plans by a number of Chinese vehicle manufacturers to set up assembly plants to serve Russia’s expanding new car demand, using mainly Chinese-made components.

Nanjing Automobile Group plans to build up to 40,000 LCVs in Russia by 2010, in what would be the largest Chinese-owned overseas deal to date, though a joint venture arrangement with a Russian partner is also mentioned.

Chery Automobile, having already announced plans for exports to Europe and the US, is to build up to 6,500 cars and SUVs in Russia from 2006.

First Automotive Works (FAW), China's biggest state-owned manufacturer and one of VW’s JV partners, began assembling vehicles at an existing Russian plant last month, and may possibly build its own Russian plant. Its production in Russia will reach 800 to 1,000 SUVs and pickups this year and up to 6,000 units next year.

Among other Chinese manufacturers’ overseas production efforts, Chery began assembly in Iran in late 2004, and Geely signed a joint venture agreement with a Malaysian partner in May, expecting to build 30,000 units in 2005. A month earlier, Brilliance China signed an agreement to produce up to 10,000 Zhonghua saloons in Egypt next year with a local partner.

China Daily quotes Jia Xinguang of the China Automotive Industry Consulting and Development Corp.: "Chinese automakers are competitive in quality when compared with their Russian counterparts and in prices when compared with their Japanese and South Korean rivals."

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