GAZ is planning a joint venture with China’s FAW Group to produce trucks in the Urals, the Russian company’s president Bo Andersson said.
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Andersson told Reuters the two companies have signed a memorandum for the venture to which FAW will bring a new generation of products while GAZ provides workers and manufacturing capability.
Russian automakers are increasingly turning to foreign partners for knowhow to help them gain market share and produce vehicles capable of competing with western brands.
FAW brand trucks would be produced in a GAZ factory in the city of Miass in the Urals region and will feature GAZ’s new medium-duty YaMZ-530 diesel engine, Andersson said.
He did not reveal how much the two companies will be investing in the joint venture or any production volumes.
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By GlobalDataAndersson added: “We will together build the right product for Russia and the CIS. FAW is offering their whole heavy duty truck portfolio. We need to have the right mix between localisation and imports.”
Reuters noted that foreign carmakers have sought to increase production in Russia – Hyundai Motor opened a plant in St Petersburg last week – to take advantage of tax breaks offered to locally produced vehicles. Currently these tax advantages do not apply to trucks.
GAZ, which is controlled by industrial tycoon Oleg Deripaska, was the only major Russian player without support from a major foreign manufacturer. Earlier this month, though, Volkswagen said it planned a new assembly line at GAZ.
