BAW to build factories in Russia

• Source: Global Times
• [17:10 January 18 2011]
• Comments

BAW is planning to build a factory with Russian auto company AMS for the production of trucks and the Knight-series SUVs, according to Mo Huibo, vice president of the Chinese automaker.

The cooperation is still in the negotiation stage. Both companies will hold 50 percent equities. If settled upon, it will be the first time for BAW to build a CKD (completely knock down) passenger car factory in Russia. 

BAW Foton, a commercial vehicle company under the brand, has already started its global strategy by building KD factories in Iran, Pakistan, Vietnam, Indonesia, and Mexico. In 2009, Foton spent $2 million to build a wholly-owned branch company in Russia. BAW also built joint venture companies in Cambodia and Egypt to produce light trucks and passenger cars. Mo believes that compared to complete vehicle export, finding partners to build joint ventures and KD factories has become a new trend in recent years. 

BAW has set an export target of 10,000 units this year, which will be 25 percent of the total export volume by BAIC Group, the parent company of BAW.

BAIC Group made 150 billion yuan ($22.78 billion) by selling 1.5 million cars in 2010. Under the background of recession of the domestic auto market, expanding to overseas markets has become another way out.