ULYANOVSK, Russia, July 19, 2011 /PRNewswire/ --
- The JV Will Assemble an Estimated 60,000 Units per Year
Beijing Automotive Group Co., Ltd. (BAIC Group), the fifth largest automotive group in China, today announced the establishment of a joint venture automotive company between two companies operating under BAIC Group, namely the Beijing Automotive Works Co., Ltd (BAW) and BAIC International Corporation, and BAW Motor Corporation (BMC) operating under AMS Auto of Ulyanovsk, Russia. The joint venture is called BAW-RUS Automotive Co., Ltd. Its main business will be commercial vehicle assembly, manufacturing, and sales. BAIC Group is the first major Chinese automotive group to establish a joint venture in Russia after the economic crisis.
The total investment for the joint venture is about USD 176 million with a registered capital of USD 20 million. BAW, BAIC International Corporation and BMC will hold respectively 42%, 8% and 50% of the shares.
The JV will gradually reach an assembly line totaling an estimated 60,000 units per year. The yearly capacity will reach 20,000 units through KD (knockdown kit) in the first phase from 2012 to 2015. The products, covering light, medium, and heavy cargo trucks, will all be sold under the BAW brand in Russia.
Since beginning cooperation with AMS in 2003, BAIC Group has sold nearly 10,000 units of light trucks in Russia as it evolved from selling auto parts to finally assembling light trucks through KD over the years.
After China and India, Russia is the fastest growing auto market in the world and is expected to become the largest new auto market in Europe this year. Of the top ten international auto brands which sell cars and light commercial vehicles, nine of them have built assembly plants in Russia. BAIC Group fully utilizes supportive policies from the Russian government and hopes to decrease production costs through step by step, localized production in order to be more competitive.
Mr. Heyi XU, Chairman of BAIC Group, said: "The cooperation between BAIC Group and AMS is a long-term, strategic decision. BAIC Group will create a positive, cooperative environment with good faith, while assembling the best products, and do so in the most efficient to provide the Russian market with quality vehicles. BAIC Group looks forward to expanding our cooperation with AMS in the future to supply a wider range of vehicles to Russia."
Last year, FOTON, a truck and bus brand under BAIC Group, signed a memorandum of cooperation with the Moscow government. The joint venture contract signed today by BAIC Group and AMS shows that BAIC Group had started a comprehensive, in-depth development phase within Russia.
About BAIC Group
Beijing Automotive Group Co., Ltd. (BAIC Group) was established in 1958 with its head office located in Beijing. With RMB 79.7 billion in assets and 65,000 employees, BAIC Group is among the top five Chinese automobile manufactures. In 2010, BAIC Group sold a total of 1.501 million vehicles with sales revenue of 158.4 billion RMB. BAIC Group owns four finished automobile manufacturing companies (BAIC MOTOR Corporation Ltd., Beiqi Foton Motor Co. Ltd., Beijing Hyundai Motor Company and Beijing Benz Automotive Co. Ltd.) and 17 subsidiaries involved in automobile parts, research and development of automobiles, clean energy vehicle, service trade and talent training in automobile, etc.
SOURCE BAIC Foton