Russia spurns Chinese automakers, but can hardly extinguish their hopes

Shanghai. November 26 (Gasgoo.com) – Starting November 10, Russian government will no longer accept foreign automakers' applications to build automobile assembly plants in Russia and all applications by Chinese automakers prior to this deadline had been declined, Chinese media 21st Century Economic Report said.

During an auto show in Guangzhou last week, Great Wall president Wang Fengying said that Russian government had agreed on Great Wall’s assembly plant in Russia, but Great Wall had not obtained any official approval.

Another Chinese automaker Geely spokesman Wang Ziliang said Geely will continue its operations in Russia but the company will have to reconsider its local production plan.

In contrast to unlucky Chinese automakers, 15 American, Japanese and European automakers have obtained approvals from Russian government, which means they could assembly automobiles by importing auto parts with low imports tariff.

However, Chinese automaker Brilliance Auto signed an agreement with IRITO Group on a KD assembly project on October 30. Under the agreement, Brilliance Auto will produce 100,000 Zhonghua Zunchi cars in a Russia assembly plant in the next five years.

Separately, Lifan auto has signed a 160 million auto parts supply contract with Russian company AutoMir. Under the contract Lifan will supply auto parts that could be used to assemble 30,000 cars in the next three years.

In another development, China's biggest auto exporter Chery has signed an agreement with a Russia company to start assembly plant in 2009. The assembly plant, with annual output 200,000-250,000 units, will allow Chery to sell 50,000 units in Russia market annually.

Jing Gebo, deputy general manager of Chery's sales division, said Russian government's recent announcement would not impact on Chery's projects that have already obtained approvals earlier from Russian government.