Chinese carmaker Geely targets Russian sales push with Belarus venture

MOSCOW Mon Jul 22, 2013 7:45am EDT

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MOSCOW (Reuters) - Chinese carmaker Geely will launch production in Belarus as part of a push to increase sales overseas, supplying the local market as well as Russia and Ukraine.

The firm said on Monday it signed an agreement with the Belarus government for a joint venture with initial planned annual capacity of 120,000 vehicles.

Zhejiang Geely Holding Group Co Ltd GEELY.UL is already the top-selling Chinese carmaker in Russia, according to the Association of European Businesses (AEB), followed closely by Lifan, Great Wall (2333.HK) (601633.SS) and Chery CHERY.UL.

While total sales of new cars in Russia fell for the fourth straight month in June, Geely recorded growth, taking market share from western peers and Russia's Avtovaz (AVAZ.MM) which still dominate the market, AEB data showed.

Geely said the capacity of the Belarus plant would eventually rise to allow it to supply Russia, Ukraine and other former Soviet states.

Its sales in Russia and Ukraine are already "particularly strong", it said in a statement. According to the AEB, sales of Geely cars soared 87 percent in the first six months of 2013, year-on-year, to 11,701 units.

Russia's auto market is expected to overtake Germany and become the largest in Europe - and the fifth biggest globally - by 2020, attracting foreign carmakers faced with lack of growth in developed markets.

(Reporting by Maria Kiselyova; editing by Megan Davies, John Stonestreet)

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