Issue: Feb 2006


Avtotor, Chery to Construct Automobile Works in Kaliningrad



by Ilya Diankoff

Russia's Avtotor and Chinese Chery have sealed an agreement to arrange facilities for Chery production in Kaliningrad. Although the prime concern today is just loading available facilities of Avtotor, the parties stand ready to invest $200 million and construct a new plant with the annual capacity of up to 150,000 cars.

"Actually, there are two parallel projects", said Valery Sokolov, CEO of Avtotor Holding. "The first one provides for arranging assembly of Chery cars based on the existing facilities of Avtotor; the second one sets forth construction of a new plant in Kaliningrad in 2007."

"We expect Chinese involvement to be rather weighty," Sokolov said, hoping to benefit from the new Act on Special Economic Areas when implementing the project.

Today's production capacity of Kaliningrad Avtotor allows assembly of 70,000 cars a year. The plant makes Kia, BMW, Chevrolet, Hummer, Cadillac as well as Chinese trucks and pickups. 2005 output reached 16,468 cars, including 7,438 Kia Rios and Sportages.

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