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Zhonghua Venture to Enter Russia on Chinese Cars

Venture to Enter Russia on Chinese Cars
// The company wants to build a factory near Nizhny Novgorod
Nizhny Novgorod region authorities are in talks with Venture Corp. company about assembling the cars of Chinese company Brilliance Auto in the region. Venture plans to build a car factory estimated at over $100 million. Neither Venture, nor Brilliance Auto have yet applied for the right to assemble cars in Russia. However, even if they do, Russian officials might refuse to approve the project.
Venture plans to build a $120 million factory making 60,000 cars a year. The factory is to produce Brilliance cars. Venture has already bought land and infrastructure for its planned factory in Dzerzhinsk.


Chinese company Brilliance Auto produces sedan cars Zhonghua and Zunchi, and minibuses JinBei and Granse. The company made $348 million of profits in 2005, with $37.2 million of net loss. Its major shareholders are Huachen Automotive Group Holdings Company Ltd (39,4%), and J.P. Morgan Chase (6,27%). The rest of the shares circulate at Chinese and US stock markets.

Venture has planned to build a factory in Russia for a long time already. It wants to produce a national car Mishka (class A) with the price beginning from $5,000. Mishka is a vehicle with metal frame and plastic body. Mishka’s greatest advantage is that it won’t become rusty. Yet, the car does not meet basic requirements of safety.
Meanwhile, neither Venture, nor Brilliance applied to Russian Ministry of Economic Development and Trade for the right of industrial assembling. However, even if they do, the Ministry might disapprove the project, because Russian officials would not like to invite investors who make cars of doubtful quality.
Dmitry Belikov; Maria Kuznetsova, Nizhny Novgorod
 

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By the way, Brilliance Auto struck a deal to assemble its cars in Russia.

Chinese automaker, Brilliance Auto group, signed a KD (Knockdown Kits) project agreement with a Russia partner in Shengang yesterday. Under the agreement, Brilliance Auto Group will build an auto production unit in Russia.

Brilliance Auto Group, which is based in China's Northeastern city of Shenyang, will be able to export 100,000 Zhonghua Zunchi vehicles to Russia by assembling them in its production unit in Russia, local newspaper Shenyang Evening News said.

Last year, Brilliance Auto signed a 158,000-unit export agreement in Germany. In March this year, the automaker signed an export agreement with a Russia partner. Under the agreement, Brilliance will export 80,000 light passenger vehicles brandnamed Jinbei Haishi to Russia.

The production unit in Russia is Brillance Auto's fourth overseas plants following those in Egypt, North Korea, and Vietnam.
 
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