China’s Great Wall Motors (GWM) became the first automobile producer from the country that has signed a special investment contract (SPIC) with the government of Russia, Vedomosti reported.
A special commission composed of several Russian governmental agencies, institution and funds approved on July 31 a resolution to facilitate GWM’s operation in the transcontinental country in Eastern Europe and North Asia, the report said.
The signing of SPIC for Haval Russia Automotive Manufacturing Co., Ltd., (GWM’s Russian subsidiary) means the Chinese carmaker will be allowed to operate businesses in Russia using the same preferential policies as that of the other foreign invested enterprises in this country in a more open and fairer market environment.
According to authorities, the Chinese company undertook an obligation to invest around $640 million in its Russian production.
“Great Wall Motors undertakes the obligation to invest up to 42 billion rubles in Russia and this huge amount of money will be used to construct a SUV manufacturing plant with its core auto parts primarily locally produced, including engine, transmission, electric control module and vehicle control system,” said Denis Manturov, Russia’s industry and trade minister.
Signed between investors and the Russian Government, the SPIC is an agreement through which the state government can provide investors with tax and non-tax incentives as well as facilitated access to governmental procurement projects. Going forward, the industrial preferential and support policies offered to localization carmakers will be realized by means of SPIC, according to GWM.
Great Wall Motors’s Tula factory in Russia, the Chinese automaker’s first wholly-owned full-process manufacturing plant outside its home market, was formally put into production on June 5. The $500 million Tula factory was completed following four years of construction with a designated annual capacity of 150,000 units, 65% of which would be produced locally.
