FAW and GAZ to build heavy-duty trucks in Russia image

Chinese automotive giant FAW (First Automobile Works) and Russia’s GAZ Group plan to start a joint venture to assemble heavy trucks in Russia from 2012, according to the Russian business daily Kommersant.

Bo Andersson, GAZ Group’s CEO, announced the partnership yesterday and said that shares in the joint venture will be divided equally between the two parties. FAW heavy-duty trucks will be assembled at the “Ural” plant in Miass, where the current production line will be upgraded. Andersson said the facility will build 10,000 units a year. The diesel engines that will equip the trucks will be produced at Yaroslavl Motor Plant, part of GAZ Group, and then shipped to Miass.

GAZ didn’t reveal how much money will be invested in the project, but according to Vladimir Bespalov, an analyst from VTB Capital, it could be worth $50 to $60 million depending of the depth of localization. The joint venture with FAW is aimed at expanding GAZ Group’s presence in the heavy-duty truck market, dominated by Kamaz. Currently, Kamaz has a share of almost 50 percent of the heavy-duty truck market, while GAZ has 18 percent with its “Ural” brand.

GAZ also plans to assemble in Russia three Volkswagen models, the Chevrolet Aveo and the Mercedes-Benz Sprinter.