Unlike Chery, the GW project stopped at the regional level without reaching the federal ministries.
Photo: Dmitry Lebedev
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Great Wall Is Run Over in Tatarstan
China’s Great Wall (GW) announced yesterday it shelves construction of the automobile plant in Russia on policy of country’s authorities. Russia’s Federal Agency for Management of Special Economic Zones is selling the site eyed by GW in Alabuga to its direct competitor, Severstal-Auto.
GW has put off the plans to construct an automobile plant in Alabuga Special Economic Zone in Tatarstan, Bloomberg reported Wednesday. The reason is that Russia’s authorities are not stable enough in their policy. GW will proceed with negotiations despite all hardships.
At latest, the Alabuga project was the second attempt to assemble Chinese cars in Russia that failed because of the country's bureaucrats. In early August, for instance, Alexander Boiko, who is the chief of Novosibirsk Transervice Holding, rejected to assemble Chinese Cheries “by advice of the federal ministries.” That refusal rooted in the RF Industry and Energy Ministry, to be more precise, in its protective effort for the national carmakers. The ministry has refuted the accusations though.
GW came up with the plans to build an automobile plant in Alabuga in March but didn’t specify the dates of the project. The annual capacity was projected at 50,000 cars (Great Wall Deer G3, Hover); GW investments were estimated at between $70 million and $100 million. GW was willing to become a resident of Alabuga and to apply for industrial assembly benefits. The industrial assembly grants customs preference for component import to Russia.
Unlike Chery, the GW project stopped at the regional level without reaching the federal ministries, at least spokesmen of the latter said yesterday they had received no project documentation from GW.
There was no chance for GW to submit such documents actually. The authorities of Tatarstan hadn’t allocated the construction site to it, and availability of such site is the mandatory provision for applying to federal ministries.
GW's intention was to arrange assembly in the shop 601 of the idle YelAz. Tatarstan agreed to contribute the shop to the assets of Special Economic Zone, and GW set up a venture in Yelabuga, Great Wall Motors, to buy out the facilities.
But Russia’s Federal Agency for Management of Special Economic Zones that obtained the assets launched parallel talks with Severstal-Auto, which is willing to assemble Fiat Ducatos in Alabuga. Severstal-Auto declined to comment yesterday, but the sources say the principal agreement has been attained already.
So, GW will have to look for another site for its plant, launching the project from scratch again. Severstal Auto is the obvious winner in this situation. GW is its direct competitor; the basic price of UAZ Patriot stands at $14,000, while Great Wall Deer G3 costs $12,000.
www.kommersant.com
All the Article in Russian as of Aug. 24, 2006
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