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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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