Avtotor to Retain SKD for Luxury Cars
Economic Development Ministry and Industry and Energy Ministry have dropped the idea of halting the SKD assembly at Avtotor, the Kaliningrad region. The carmaker will have the annual quota of 10,000 cars and proceed with assembling the premium brands, including BMW, Cadillac and Hummer, and probably Chevrolet Tahoe and Trail Blazer. But the assembly of Kia and Yuejin is under the threat.
Economic Development and Trade Ministry, Industry and Energy Ministry and Federal Customs Service have actually agreed on the new operation terms for Avtotor automobile plant, sources with federal departments said. The decision is to keep the SKD assembly at Avtotor but to limit it to 10,000 cars a year. The restrictions will take effect April 1, 2008, extending to all contracts of Avtotor, both the current and new ones.
Avtotor produces Kia, BMW, Hummer, Chevrolet, Yuejin and Chery, all of them assembled by SKD method, i.e. without welding and painting the body. Some 83,500 cars were assembled from January through October of this year.
The initial plans of officials were to completely halt SKD at Avtotor, making it proceed to the deeper assembly. But the plant has independently set to constructing the welding and painting lines (for 50,000 bodies with potential increase to 130,000) and the bureaucrats decided to keep the SKD but for the premium brands exclusively. The demand for them is narrow and the quota of 10,000 will suffice for this purpose. Even this year, Avtotor isn’t going to produce more than 6,000 BMWs, Cadillacs and Hummers.
www.kommersant.com
All the Article in Russian as of Nov. 23, 2007
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