Chinese passenger car, pick-up and sport utility vehicle (SUV) manufacturer Great Wall is looking to begin manufacturing four of its models when it opens its new Russian plant in the Tula region in 2017, according to a Prime-TASS news agency report. According to the Russian news agency the new plant will build the Great Wall B-Car segment H2, the H6 Coupé and the H8 and H9 SUVs.
Significance: Great Wall began construction of its plant in Russia in August last year at the worst possible time, as the Russian economy at that point was rapidly sliding into recession as a result of the plummeting value of the rouble, declining oil and gas revenues and sanctions from the European Union (EU) and the United States (US). This has led to light vehicle (LV) sales declining by 36.3% y/y in the first quarter of the year to 383,691 units. Great Wall was one of the most proactive Chinese OEMs in terms of expanding its production footprint overseas, with it already having opened an assembly site in Bulgaria during 2012. However, for the next few years IHS Automotive is forecasting less output from the new wholly owned plant than from the company's contract manufacturing arrangement for semi-knocked down (SKD) kits which led to Great Wall assembly in Russia reaching a peak of 23,525 units in 2012. IHS Automotive's current forecast is for Great Wall to manufacture the H2, H6 and H8 at the new plant with volumes rising to almost 20,000 units by the end of the decade.
