SOFIA: With a brand new Bulgarian plant set to start churning out cars by end-February, China's Great Wall Motor hopes to establish a foothold to expand sales across Europe, says its local partner Litex Motors.
"This is the first plant for a Chinese automaker that will produce in Europe and for Europe," Litex Motors marketing director Ivo Dekov said in an interview with AFP ahead of the plant's opening on February 21.
The industrial assembly facility in the northern village of Bahovitsa will initially employ 150 workers, capable of making 4,000 automobiles per year from China-imported kits.
"But production will increase as the markets here and in other European countries develop," Dekov said.
"Depending on demand, we can produce an annual 50,000 vehicles with 2,000 workers on two shifts, or even 71-72,000 on three shifts," he said confidently.
Bulgaria's qualified and competitive workforce as well as its low taxes made the poor EU newcomer an ideal starting base to enter the common EU market for Great Wall Motor, one of the biggest sports utility vehicle makers in China, Dekov said.
"Our partners consider Europe a strategic market and count on entering it gradually but permanently, with good products and a successful strategy."
"But it is only natural that our primary goal is to also become a leader in the domestic market," he added.
Litex signed a deal for a joint venture with Great Wall Motor in 2009 that would allow the Chinese group to export tax-free to the common EU market.
Now the Bulgarian group aims to achieve the same market share -- about 30 percent -- as other automakers with locally produced cars in neighbouring Romania, Serbia and Turkey, according to Dekov.
"Of course, we will need time to do that as we are only learning to walk right now," he said.
The plant, which has been test producing since mid-November, is ready to start sales immediately of two locally-assembled Great Wall models -- the Voleex C10 city car and the Steed 5 pick-up, with prices ranging between 16,000 and 25,000 leva (8,200-12,800 euros, $10,700-16,700).
Over 200 imported vehicles were already sold in Bulgaria between mid-October and end-2011, Dekov said.
"I consider this a great success! On the whole, interest in the brand, the plant and the vehicles has been huge and customers' reactions have been thoroughly positive."
The cars' affordability, a five-year guarantee and other car equipment included in the starting price will help Litex compete well in a market where the ratio of new-to-used car sales is just 1:10 compared to Europe's 1:3, the group believes.
The 24-hour delivery of spare parts through 17 dealerships and after-sales service points in Bulgaria -- set to grow to 20 this year -- was another competitive advantage, he added.
"This year we will also add three more models to the plant's production range, including the Hover H6 SUV," Dekov said.
"Great Wall Motor's overall plans for Europe are to offer a total 8-10 models by 2016," he added.
Great Wall, which sells cars in 120 countries, is the only Chinese automaker to have obtained Whole Vehicle Type Approval to market several of its models in the EU. China-made Great Wall Motor cars have already been selling in Italy since 2006.
"Plans are to start sales in Bulgaria and cover the other European and Balkan countries with what we supply," Dekov said.
In the long run however, Litex hopes to start making some parts here rather than only assembling China-imported kits, and talks have already started with possible subcontractors, he added.
Litex Motors, which made the bulk of the investment in the new Bulgarian plant, will also start building welding and painting units to add to the simple assembly lines over the next few years.
Copyright AFP (Agence France-Presse), 2012
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