MOSCOW, Nov 18 (PRIME) -- Chinese state-owned car producer Beijing Automotive Industry Holding Co. (BAIC) and Russian car producer Avtotor are in negotiations on assembly of Chinese cars in Kaliningrad, Vedomosti business daily reported on Friday quoting market sources.
A source told Vedomosti that the two companies are already at the stage of signing an agreement, and that BAIC was not the only Chinese car producer that was discussing assembly with Avtotor. The Russian carmaker is also in talks with the subsidiaries of Chery, the source said.
The situation is complicated by a large cost of car components imports, as only sea transportation from China is possible now, which will cost around U.S. $3,000 per car kit. Moreover, it is unclear who will sell BAIC cars in Russia, as Russians are unaware of the brand, and a distributor will have to spend $6–8 million in advertising to sell up to 20,000 cars per year, a source told the business daily.
The Kaliningrad-based car producer lost all its main assembly partners in Russia gradually over the past several months, as BMW stopped exports to Russia and assembly in Kaliningrad in March while Hyundai and Kia stopped car assembly in October. In September, Avtotor founder Vladimir Shcherbakov said that the company will readjust production to start assembly of new brands in 2023.
An Avtotor representative confirmed to Vedomosti that the company was preparing for the launch of production of new car brands and that it was working with several new partners, but refused to name the partners, the business daily said.
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