Great Wall Motor to make cars in Bulgaria

China's largest sport utility vehicle maker, Great Wall Motor Co, plans to start manufacturing cars under its badge in Bulgaria, the government said in a statement on Tuesday.

In a joint venture with a Bulgarian partner, Great Wall plans to invest 80 million euros in a new car plant at Lovech, about 170 km northeast of Sofia, the government said after Prime Minister Sergei Stanishev met with Great Wall's vice presidents.

Bulgarian media have reported that private company Great Wall's investment partner is probably local firm Litex.

The project, which will employ about 1,500 people, is expected to be launched at the start of 2009. No other details were disclosed.

Bulgaria, which sees Foreign Direct Investment dropping by at least 1.0 billion euros from a record 6.5 billion in 2007, is struggling to attract production-linked investment to boost its exports and decrease risks from its huge current account deficit.

French car parts maker Montupet, Japan's Yazaki, a supplier of vehicle power and data solutions, and Belgian company Melexis , which designs electronic automotive chips, have also invested in new production units in Bulgaria.

In April, Great Wall, maker of Hover SUVs, said it was diversifying into car production and plans 10 billion yuan in investment over the next three years, including 3 billion yuan to shore up its research and development capability.

The Bulgarian government quoted Great Wall executives as saying they will not freeze their investment projects because of the global financial crisis.