Geely To Build King Kong in Russia

MOSCOW — Geely, the Chinese automaker and owner of Volvo, is considering construction of its first assembly plant in Russia in order to increase sales and become more competitive in that growing market. Among the vehicles Geely plans to build in Russia are the compact MK sedan, which is sold in China as the King Kong, and the midsize FC sedan, also known as the Vision.

Zhang Lin, CEO of Geely International Corporation, in an interview with the Russian business paper Slon, said building its own plant will allow Geely to shift from the current SKD (semi-knocked-down) kit assembly to full-scale production and local sourcing of components.

The production capacity of the new plant was not disclosed, but Russian industry analysts estimate initial capacity at 30,000-35,000 cars a year.

The Geely MK currently is assembled from kits under license by Derways in Ingushetia. According to Zhang, the kit assembly deal with Derways remains inconvenient in terms of localization of components and the availability of workforce. In addition, the plant is located far from Russia's major markets.

In addition to the new assembly plant, Geely plans to organize its own production sourcing of components in Russia through the establishment of a special industrial park, where Chinese producers of auto parts are expected to locate.

Geely plans to sell 10,000-15,000 cars in Russia in 2011, despite the fact that sales last year totaled only 1,944 cars, which placed it behind such Chinese competitors in Russia as Chery, Lifan and Great Wall.

Inside Line says: The name MK doesn't seem nearly as sexy as "King Kong." — Evgeniy Vorotnikov, Correspondent