Russian companies interested in buying Brazilian engine factory

22 March 2006

Sao Paulo, Brazil, 22 March – Two Russian companies have joined forces to present an offer to buy Tritec, the DaimlerChrysler/BMW engine factory in Brazil, in a competing bid to that of Chinese group Lifan, Brazilian newspaper Gazeta Mercantil reported Tuesday.

Russian companies AvtoVaz and Gaz, unlike Lifan, plan to keep the factory in its current location, in the city of Campo Largo near Curitiba, the state capital of Paraná in southern Brazil.

The aim of the Chinese company, if its offer is accepted, is to dismantle the factory and re-assemble it in its industrial area in Chongqing, China, over 13,000 kilometers away from its current location.

The Lifan Group plans to relocate the factory over the next few years in order to start engine production in China in 2008.

Representatives of the Russian companies are due to visit Tritec in April during a tour of Brazil by Russian prime minister, Mikhail Fradkov.

Tritec was built in 1996 at a cost of US$500 million and the factory makes use of the latest US and German technology, producing 250,000 units per year.

AvtoVaz manufactures the Lada and Niva brands, which are known on the Brazilian market, especially in the 1990s when the Russian company had a network of 140 stores in Brazil.

Chinese group Lifan plans to start selling motorcycles in the Brazilian market this year, through a partnership with Brazilian group Kasinski. It expects to sell 10,000 units by the end of 2006. (macauhub)