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. Last Updated: 07/27/2016

Geely Declares Plans to Start Assembling Its Cars in Russia

bloombergThe CK sedan model on display during an auto show in Detroit in January.
Chinese carmaker Geely plans to start assembling its cars in Russia next month as part of its global expansion strategy, a senior company executive said Thursday.

Geely, which won a deal last year to produce London taxis in Shanghai, will team up with Automobile and Motors of Ural, or Amur, a former branch of truck manufacturer ZiL, to produce cars from semi knocked-down kits, Geely Holding Group vice president Jie Zhao said.

"Assembly will start from next month," Jie said.

Jie declined to specify how much money Geely would invest in the project, but Amur's commercial director, Yury Rylov, said the Russian company would spend $50 million on starting production. After a trial batch of 300 cars, Geely may also invest in the project, Rylov said in a telephone interview from Novouralsk, Sverdlovsk region, where production will be based.

The carmaker plans to make and sell 19,000 units this year, 30,000 units next year, and 50,000 in 2009, Jie said at the Adam Smith Automotive Conference in Moscow.

The CK sedan is the Chinese carmaker's first model to be assembled in Russia; two other models will be introduced next year and another two models are planned for 2009, Jie said, without giving any further details. Jie said Geely eventually planned to produce its cars using locally made parts, although it has not yet started talking to local suppliers.

Automotive experts are skeptical, however, that Chinese carmakers, such as Great Wall and Chery, will be able to win a significant market share in the immediate future.

"Nobody knows what those cars are like," said Kirill Chuiko, an automotive analyst with UralSib.