KAMAZ returns to China

Russia’s KAMAZ Corporation, one of the leading truck manufacturers in the world, plans to set up a joint venture in the Chinese city of Dalian in eastern Liaoning in 2011. It will spend 13 million U.S. dollars to the organize production and the sale of KAMAZ trucks in China.

The KAMAZ Company is not a newcomer to the Chinese market. It set up two joint ventures in the 90s. One was engaged in the production of military equipment on the KAMAZ chassis and the other provided services to the Russian trucks supplied to China. However, the factory sold its assets in 2005-2006 to its Chinese partners and withdrew from the project.

At the time, there was a high demand for Russian trucks, especially for the most reliable model, the 55111, in China. The high demand for the Russian trucks was triggered not only by their technical superiority but also by their artificially lowered prices, as the two sides practiced barter trade in bilateral economic relations in the 90s. Sometimes, the Chinese traders managed to bargain the prices of the new tipper lorries down to 12-13 thousand U.S. dollars a truck. In 1996, KAMAZ factory stopped supplying trucks to China. By that time, about 50 thousand trucks were in China.

However, current cooperation is parity-based and is mutually beneficial, says KAMAZ marketing director, Ashot Arutyunyan.

“The Russian factory’s Chinese partner is ready to invest money in the project. At present, the two sides are examining concrete issues linked to the setting up of the joint venture and its functioning. According to the Russian side, the new venture should be engaged not only in the production of trucks, but also their distribution. This will lower risks linked to intellectual rights which are typical for the Chinese market. The factory should produce up to 10 thousand trucks a year to meet Chinese legislation, which insists that a new automobile factory should produce at least this number of vehicles a year. Some of the KAMAZ trucks assembled in China will be exported to countries in central and southern Africa,” Ashot Arutyunyan said.