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Great Wall opens European factory

Chinese carmaker Great Wall has opened its first European car assembly plant in Bulgaria as it looks to establish a foothold with sales starting this year.

Initial assembly is expected to be done using SKD kits (semi-knocked down) with the models actually manufactured in China.

A network of 30 UK dealers will be in place before the end of this month with demonstrators available to the network before the March plate-change.

Vitaly Belsky, a consultant at Frost & Sullivan, said: “Setting up production in Bulgaria is clearly a long-term strategic move for China’s Great Wall Motors which will open a door for locally manufactured cars to be exported to the rest of Europe tax-free.

“And there is little doubt it will find its customers, if safety and quality standards continue to improve, even though other car manufacturers like Mitsubishi stop car production in Europe due to tough auto market conditions.

“The bigger question is: what are the benefits for Bulgaria? Short-term benefits are quite obvious and quantifiable, such as new jobs and tax revenues. However, long term benefits are less clear.”

Belsky believes that if Great Wall does eventually plan to build its cars in Europe, it will have trouble developing a supplier industry in Bulgaria unless it moves volumes to over 500,000 units a year. Great Wall is currently planning to produce up to 70,000 cars a year.

He said: "Yet, focusing on alternative mobility solutions (such as electric vehicles from the Chinese automaker which can be produced in small volumes in 2012 already) and electrical/electronic components (batteries, motors and control electronics) manufacturing could help Bulgaria to become a new country on the automotive manufacturing map of Europe."

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