Session to discuss investment project meant to start assembling cars in Belarus
It is necessary to add Belarusian experience and best practices to the BelGee car manufacturing project. Belarus President Aleksandr Lukashenko gave the relevant instructions at the government conference held on 30 November to discuss the implementation of an investment project meant to start assembling cars in Belarus.
Aleksandr Lukashenko reminded that he had dreamed about the project to start car manufacturing in Belarus for a long time. “I have a dream. I would like Belarus to make cars in addition to heavy trucks, medium-capacity trucks, and tractors. The cars should be close to people’s car standards so that the country could satisfy the demand of corporations and individuals for Belarus-made cars,” he said.
“Naturally, in modern conditions getting such a project off the ground on our own is next to impossible. It would be impossible in Belarus because the market is different and so on. Most of all, many countries that make cars are years and centuries ahead of us. It would be very difficult to create cars and compete with those countries that make good cars today, for instance, Mercedes cars, Japanese, Korean cars and so on,” noted the head of state.
“This is why instructions have been given to find a country that would be ready to help us create an acceptable car, a car for our people using our technologies and theirs. The car has to be advantageous for us as far as the quality and the price are concerned,” stressed the President. The People’s Republic of China is such a country. According to the head of state, China is about to rule the world as far as these products are concerned by making good quality cars. The project to assemble Geely cars in Belarus is a convincing argument. Some components are supplied by the Belarusian side.
“Looking at the car assembly project, we decided that we are going to have a car of our own and we are going to create it together with the Chinese using their technologies. It does not mean that we are going to make replicas. Where we can — and we can indeed, we have the experience of assembling and making trucks and components for cars — we should utilize our own experience and our own best practices. The National Academy of Sciences of Belarus and the applied sciences have them, too. This is why we should gradually improve this car and build a factory to make the so-called BelGee cars,” stressed Aleksandr Lukashenko.
The President remarked that the factory is being built, including with assistance of a Chinese loan. Once the first startup complex is commissioned, it will be able to make up to 60,000 cars per annum. Once the second complex is commissioned, the output can be increased up to 120,000 cars per annum.
“Where we are going to sell the cars is the number one question. Are we going to find a market for our cars?” Aleksandr Lukashenko addressed those present. “It is understandable that we will secure the domestic market, we will enable the relevant conditions.”
“Certainly, we will convince the team to make the best quality cars. The cars will be good taking into account the fact that the enterprise and the aftersales service are located in the country and the state is demanding. But then there are better cars although the prices are higher. We don’t know whether Belarusians will buy our cars or will opt for a more expensive, better known brand. This is why market is the number one question,” stressed the President.
Aleksandr Lukashenko was also interested in financial and manufacturing aspects of the project.
The head of state was reported on the current status of the construction of the plant. According to Vladimir Semashko, delivery of the equipment and its installation will begin in January-February. The first phase of the plant will be launched by the end of 2016. In 2017, it should produce 60,000 cars.
Vladimir Semashko said that even under the most pessimistic scenario, given the certain decline in the market, the plant can sell 50,000 cars.
China’s CITIC is the general designer and general contractor of the project. The company will be eligible to the terms previously guaranteed to the BelGee founders. The head of state intends to sign a relevant decree this week.
“I believe that thanks to their good price-quality ratio, safety, and service, the automobile Geely and our joint product BelGee have found their customers. Figures speak for themselves. For example, in 2013 the sales of Geely cars on the Russian market rocketed by 41% while those of such leading automobile producers as Mercedes, Audi, Volkswagen, Renault, Citroen, Mitsubishi, and Honda dropped by 15-35%. Today the share of Chinese automobiles on the CIS market makes up some 4% and is projected to reach 10%,” Vladimir Semashko noted. He added that in two years the demand on the Russian market alone is expected to reach some 3 million Geely cars.
“Therefore, we can sell some 250,000-300,000 cars on this market. Our target is 120,000 cars per year. The degree of localization should reach at least 50% by July 2018,” the Vice Premier said. He pointed out that many Belarusian companies will be involved in the production of components to achieve this level of localization.
According to the business plan, as much as $318 million will be invested in the construction of the plant and internal infrastructure and some Br320 billion – in the development of external infrastructure including roads, railroads, systems of gas, electricity, and water supply, the sewerage system, etc. Once the first production line is commissioned, the plant will employ 1,285 workers. Some 1,850-1,900 people will be working there once the plant achieves its designed capacity. “I should note that these will be highly qualified specialists who will work with state-of-the-art equipment and get decent pay,” Vladimir Semashko stressed.