Belarus JV Launches Geely Assembly

VIENNA – Volume assembly of the Geely SC7 sedan is under way at the BELGEE joint venture plant in Borisov near the Belarus capital of Minsk.

BELGEE is owned 50% by dump-truck manufacturer BelAZ, 32.5% by China’s Geely Automobile and 17.5% by Soyuzavtotekhnologii, a 50:50 JV between Belarussian supplier BATE and Chinese company Shentou.

Both BelAZ and BATE are state-owned companies.

Initially the cars are being assembled from semi-knocked-down kits sourced from China.

BELGEE has adapted existing premises on the grounds of supplier Borisovsky Zavod Avtogydrousilitel for the SKD assembly. The plant’s annual capacity is about 10,000 units.

Sales of locally assembled Geely cars will start in Belarus this month. Price of the sedan, which is powered by a 127-hp 1.8L gasoline engine, is expected to start at $12,990.

“If it will be about 1,000 cars in the first year, it would not be bad,” BELGEE Director Dmitry Batrakov tells the BELTA news agency about his volume expectations for the Belarus market this year.

The company plans to export its cars to Russia and Kazakhstan, which together with Belarus have formed a trade pact.

Belarus Industry Minister Dmitry Katerinich tells local journalists shipments to Russia may start in mid-2013.

However, BELGEE may be confronted with barriers if it tries to export Belarus-assembled Geely cars to Russia. Even before its launch, the project was drawing criticism from Russia. Currently, the Geely SC7 is the only model built in Borisov.

“BELGEE may add assembly of the Geely GX7 (cross/utility vehicle) before the end of this year, but the final decision about the second model has not been made yet,” a BELGEE spokeswoman tells WardsAuto.

SKD assembly is just the first stage of the BELGEE project.

The JV already has selected a location for a future complete-knocked-down plant.

“The new factory will be located near the village Peresady in the Borisov district,” Katerinich says. “Construction work is to start in September.”

The CKD project will be realized in two phases. In the first stage, volume is planned at 60,000 cars annually, beginning the end of 2015. In the second stage, planned for 2016 to 2017, the plant’s capacity is to be doubled to 120,000 units and a stamping plant will be constructed.

The start of CKD phase also will mean the use of locally manufactured components. According to Katerinich, Geely already has audited 10 Belarussian parts makers. Some local companies attended a recent Geely supplier conference in China.

BELGEE hopes to reach full capacity by 2020.

In related news, the Unison assembly plant in Obchak near Minsk, which used to build Iranian-made Iran Khodro Samand sedans in small volumes from SKD kits, phased out Samand assembly last year and plans to launch output of Chinese-made Zotye Z300 sedans soon.