MINSK, Belarus -- A joint venture between
Belarus and Chinese carmaker Geely launched a plant
producing Belarussian-made crossovers, targeting Russia.
The investment is a measure of growing political ties
between China and Belarus, a country envisaged as a gateway for China to the European Union, and part of China's giant investment
initiative known as One Belt One Road.
China is a welcome source of funds for Belarus, which relies
heavily on Russian money to keep its Soviet-style economic model
afloat and strongman president Alexander Lukashenko in power.
China is building a new airport in Minsk, energy
infrastructure and a commercial park known as Great Stone just
outside the capital.
Lukashenko said Friday the plant embodied his dream of having cars
produced in Belarus and promised to sign a decree stimulating
car sales in the country.
"Our friends responded to my request and helped to create
this beautiful plant," said Lukashenko, according to the state
The plant, 70 km (44 miles) from Minsk in Zhodino, aims to produce
25,000 and 35,000 cars in 2018 and 2019, respectively, and has the
capacity to make 60,000 cars per year.
"Ninety percent of the cars produced will be targeted at the
Russian market," the company said in a statement.
Belarussian authorities have spoken previously of plans
to expand the plant to increase production to 120,000 cars.
But in the first nine months of this year, Geely sold only
about 1,700 cars in Russia, and sales volumes fell 55 percent
compared to 2016.
According to Russian analysts, the plant, which will take
advantage of Belarus's membership in the Russian-dominated
Eurasian Customs Union, will allow Geely to increase sales.
But even so, analysts downplayed the ability of the Russian
market to absorb more Chinese cars.
"The market is growing, but it depends on prices and the
range. In any case they will not be able to sell 30,000 per
year," said Sergey Udalov, deputy head of consultancy Autostat.
"It is possible to increase sales to 10,000, but I
do not think they will be able to sell more."
The plant is not Belarus's first attempt to establish its
own car production. Previous efforts included investment from
Ford and Skoda, but these projects folded.