The Chinese car manufacturer BAW is to create a new car brand especially for Russia.
On 22 September,BAWpresented an updated production line for side-trucks with a load capacity of 1,700 Kg with a gas-petrol engine made by JSC Zavolzhsky Motor Works (which belongs to JSC Sollers) and gas equipment made by the Italian companyLovato. The vehicles are 60% localised.
The company has also announced creation of a Russian brand. "We are creating a Russian vehicle brand under which we will produce trucks, buses and off-roaders”, Interfax quotes General Director of BAW-Rus Motor Corporation Andrey Lukyanov.
The new brand is currently being registered and the name has not yet been disclosed. "We can say that it is connected with the city of Simbirsk. Preliminarily, we may state that we will manufacture under this brand, in particular, petrol trucks called Pegas and Fenix diesel trucks”, the top manager notes.
The company is also planning to increase localisation of the current model line and develop gas engine light commercial vehicles.
In all, the Chinese vehicle manufacturer BAW is counting on its Ulyanovsk works producing 2.5 thousand trucks a year. Moreover, as a company representative explained to Interfax, the plan is to reach this production level within the next 2-3 years, during which BAWalso intends to occupy up to 5% of the market for light commercial vehicles.
Full cycle production of trucks has been launched at the company’s existing capacities, which were updated during the last year. TheBAWworks in Ulyanovsk can produce 25 thousand vehicles a year. USD 50 m have been invested in the project and the plan is for another USD 100 m to be invested. Half the initial investment in the project was contributed by the Russian partner of BAW in Russia – the АМСGroup.
Moreover, BAWis not the only Chinese motor manufacturer expanding its business in Russia. At the beginning of the year, for instance, the ChineseGACMotorCo. (asubsidiaryoftheGuangzhouAutomobileGroupCo.) announced its intention to build an assembly works in Russia.
The Wall Street Journal quotes GAC Motor Co. CEOWuSongas saying that a decision on implementing the project will be made this year.
In his opinion, the difficult situation in the Russian economy creates additional opportunities that would most likely be lacking in a period of stability. The planned Russian enterprise might start by producing fewer than 50 thousand vehicles a year.
In turn, theChinesemotormanufacturerJACMotorsis considering the possibility of setting up an assembly unit on the site of LLC Taganrog Motor Works (TagAZ, Rostov Region). In March, adelegationofJACMotorsrepresentatives visited the Rostov Region to study the technical condition of TagAZ and hold talks with its founders and creditors.
According to Chairman of the Association of Businessmen of the Chinese province of Anhoy in Russia U Sianbao, the interest in TagAZ is connected with the fact that the enterprise produced motor equipment, including under Chinese brands, “had a good level of assembly”, a production base, and its own niche on the market, as well as qualified personnel.
For its part, the Chinese automotive concernGreatWallMotorshas launched construction of a motor works in the Tula Region. In accordancewiththeagreementsigned in 2014 between the Chinese company and the government of the Tula Region and Development Corporation, up to 60% of the motor parts for the future plant will be made on the territory of the Uzlovaya industrial park. Start-up is planned for 2017 and completion of the project for 2020.
Inaddition, asInterfaxwastold by Vice-Chairman of the management board of the LifanIndustrygroup Chan Wei, it is planned to launch the new production in the summer of 2017.
The plant will produce second generation models of the LifanX60, LifanX80 and others that “will be in demand when the plant start operating”, the company representative said.
The design capacity of the first stageis 60 thousandvehicles a year and"if necessary, we are prepared to increase the plant’s capacity, it all depends on the capacity of the market”, he added.
Lifanplans to bring localisation of production up to 50%. "In our understanding, production of bodywork in Russia already constitutes 10-15% localisation. Inconsiderationoftheintendedproduction, itisplannedtoprocurediscs, tyresandbatteriesandsubsequently possibly to localise production of engines, windows and seats", the Vice-Chairman of the Board said, adding that Lifanitself is planning to develop other spheres: production of engines, units, electric and hybrid cars.
Lifancars currently sold in Russia are assembled in Cherkessk by LLC Motor Company Derways.
One more major project is creation of a joint venture for production and sale of KAMAZ trucks in China and Hawtai cars in Russia. At the beginning of September, OJSC KAMAZ and the ChineseHawtaiMotorGroupsigned a relevant agreement.
KAMAZ will contribute its own production sites in Russia to the authorised capital of the joint venture, as well as truck production technologies and management resources. In turn, HawtaiMotorGroupwill provide the JV with technologies, design development and other know-how in the sphere of car production.
Chinese automotive manufacturer Lifan may begin building an engine production facility in the Lipetsk Special Economic Zone (SEZ) in 2018–2019, Lifan Motors Rus Deputy General Director Vyacheslav Glazunsky said. “The next stage is to set up engine and forging production facilities. We will begin construction a year or two after the plant is built,” he said. The company began building a full cycle automotive production plant on 16 July with investments of USD 300 million. Production is to begin in 2017.
The plant will have initial production capacity of 60,000 vehicles and will expand in the future based on export potential, Glazunsky said. He did not specify the approximate parameters of such expansion or the construction of the engine production facility or forging shop, noting that this will depend on the market and other factors. Lifan electric vehicles will eventually be assembled at the SEZ site and a scientific research centre will be built, he said.
Lifan vehicles currently sold in Russia are assembled at Derways Automotive Company in Cherkessk. There are no plans to shut down this production facility, however no new models are expected to be manufactured at the Cherkessk plant this year, Glazunsky said.
Yesterday, on the territory of the Lipetsk industrial type special economic zone, the foundation stone laying ceremony was held for the Lifan car factory. During the event, Lipetsk Region Governor Oleg Korolyov thanks the “heads of Russia and China”, who are “co-operating as strategic partners” today: “I am convinced that the main thing in investment policy is not money but an atmosphere of trust. We will continue supporting this”. According to Korolyov, the opening of the Lifan motor works in Lipetsk is comparable to travelling the great Silk Road in just one year and co-operation with China comparable with a political and financial pump for Russia. In turn, Counsel for trade and economic of the Chinese Embassy in Russia Zhang Di recalled that the rapid industrial development in the People’s Republic of China had been greatly facilitated by Soviet specialists. Vice-President of Lifan Industry Mu Gan stated that he saw the Russian market as “having great potential that is only gaining in strength”. Start-up of the Chinese car manufacturer’s plant is planned for the summer of 2017; construction is evaluated at about USD 300 m. The enterprise is to manufacture the brand’s entire model range, including body welding and painting. The initial design capacity is 60 th. vehicles a year. Lifan estimates that the project will pay for itself in seven years.
Chinese automaker Lifan will start building a factory in the Lipetsk special economic zone (SEZ) on 16 July, SEZ CEO Ivan Koshelev said. “Also on 16 July, a presentation of the project will be organized, along with a demonstration of new Lifan vehicles,” Koshelev said.
According to previous reports, the facility will become operational in the summer of 2017. Investments in the project will amount to approximately $300 million and can be further expanded to build an engine-making factory. The new plant will be manufacturing the entire Lifan lineup and comprise welding and painting shops. The initial design capacity of the factory is 60,000 vehicles per year. There are plans to export some of the output.
Chinese car producer Lifan will build an engine assembling plant in Russia after 2021, Director of the company’s representation in the country Sun Jiejun told PRIME on Thursday.
“The concrete date will be calculated in line with market changes to occur by the end of this decade,” Jiejun said.
In October, Lifan signed an agreement of intent with the Lipetsk Region to build a U.S. $300 million plant with a capacity of 60,000 cars. According to earlier documents, the plant will reach its target capacity in 2021.
Localization will initially stand at 10-30%, the official said.
Lifan will not cancel partnership with Derways facility in the Caucasian republic of Karachayevo-Cherkessia until 2018, he said.
“We will maintain partnership with this facility for a long time. We may continue to produce some models on the plant because both parties want to retain the partnership. Maybe, we will find a new line in partnership and in business,” he said.
Lifan will launch 10-30 new dealers’ offices in Russia in 2015, Jiejun said. The company will focus its sales strategy on consumers in Urals, the Volga Federal District and the European part of Russia, he said.
Chinese motorcycle and automobile manufacturer Lifan would build a car plant in one of the special economic zones in central Russia, a governmental agent said Tuesday.
"By January 2015, the Lifan company plans to complete the project's paperwork," a governmental agent of Russian special economic zones said in a statement.
According to the document, Lifan hopes to start production in the central Russian city of Lipetsk in April 2017 with an operation period of at least seven years.
Lifan inked a deal with Lipetsk regional administration in October on the investment of 300 million U.S. dollars.
The plant is Lifan's first car plant with a complete assembly cycle in Russia. It is expected to create 1,500 jobs while producing 60,000 cars of different types annually.
Lifan currently occupies slightly over 1 percent of the Russian car market with nearly 22,000 cars sold in 2014. After the plant in Lipetsk starts production, Lifan's share might grow to 1.9 percent.
The Lifan Group signed an investment intention agreement with the government of Russia's Lipetsk Oblast on Monday, planning to invest approximately 300 million US dollars into the construction of a brand new vehicle plant.
The new plant is to be located in the Special Economic Zone of Lipetsk Oblast, with a total area of 600,000 square metres. Modern welding, coating and assembly workshops will be built in the factory, with a planned annual capacity of 60,000 vehicles after production begins. This factory will be Lifan’s third fully–owned vehicle plant overseas, after expanding into Uruguay and Ethiopia. It is also to be the largest overseas investment project of Lifan has produced.
In 2007, Lifan built assembly lines in a Russian Derways factory, producing Breez, Solano, Smily and X60 vehicles. In 2013, Lifan achieved total sales of 27,467 vehicles in Russia, an increase of over 30% compared with the previous year. It has become the largest Chinese car seller in Russia's auto market for three consecutive years. Presently, Lifan owns 156 dealers in 91 Russian cities, more than any other Chinese car brand.
Lifan Industry (Group) Co. Ltd
Company's website: https://www.lifan.com
T: +86 23 61663253
Public company (601777:CH)
Contact: Shang You, President
Lifan Industry (Group) Company Limited develops, manufactures and sells motorcycles, cars and gasoline engines. The Company's major products include motorcycles, motorcycle engines, passenger cars, passenger car engines, gasoline engines and other terminal products such as generator sets, water pumps and lawn mowers.