Taiwan’s Luxgen Launches SUV Production in Russia

VIENNA – The first Luxgen7 SUV destined for showrooms drives off the assembly line at the Avtomobilnaya Kompaniya Derways plant in Cherkessk, Russia.

Derways, a contract assembler of Chinese cars, builds the SUV from complete-knocked-down kits sourced from Taiwan. Russia is the third country, after Taiwan and China, in which the Taiwanese brand is built.

“In Cherkessk, we are opening our third production site worldwide,” Vincent Tsao, Luxgen senior vice president, says during the Job One ceremony. “Four years ago we started negotiations with the Derways plant about joint production and today we see the Luxgen7 SUV coming off the assembly line of this plant.”

Derways constructed a separate welding and assembly hall with machinery from South Korea for its Luxgen operations. While some Derways employees were trained in Taiwan, the ramp-up at Cherkessk is being overseen by a Taiwanese group.

The installed annual capacity for Luxgen vehicles is 40,000 units. Derways plans to assemble about 1,500 of the SUVs this year, reaching monthly volume of 450 units by year-end.

The vehicle goes on sale Sept. 7. Luxgen is expected to name up to 20 dealers in Russia in coming months.

The Taiwanese auto maker already has opened a parts warehouse near Moscow in cooperation with the Japanese logistics company Nippon Express.

“Today, the SUV segment is quite popular in Russia; therefore we are sure that the Luxgen7 SUV will be a success,” Alexander Romanov, Derways vice president-development, tells WardsAuto. “And I am sure that it is not the last model from Taiwan we will launch at the Derways plant.”

Plans call for the assembly of the Luxgen5 sedan and Luxgen7 MPV multipurpose vehicle at the plant. Derways, located in the capital of the Republic of Karachay-Cherkessia in South Russia, assembles Geely and Lifan cars from CKD kits sourced from China in addition to Luxgen.

The assembler plans to add China’s Brilliance cars to its portfolio this fall. Hawtai is another Chinese brand Derways may add in the near future.