Brilliance China Automotive Holdings Ltd said it has signed a contract with a Russian car maker to set up its fourth overseas factory in order to avoid paying high import tariffs.

The move follows its deals to export 158,000 Zhonghua Zunchi sedans to Germany and 80,000 Haise light commercial vehicles to Russia last year as Brilliance steps up efforts to expand its Chinese nameplate overseas.

Brilliance, based in Shenyang, capital of Liaoning Province in China's northeast, plans to sell over 100,000 Zhonghua Junjie sedans in Russia in the next five years after they have been assembled in a plant owned by Russia's Irito-Invest, the company said in a statement yesterday.

The model, powered by a 1.6-liter or 1.8-liter engine, will use components exported from Brilliance Jinbei.

Manufacturing will start in January with sales planned to begin in March. Brilliance aims to sell 10,000 units next year before raising the volume to 31,414 in 2012.

The Chinese auto maker said its plan was not affected by Russia's earlier announcement banning overseas car makers from setting up assembly lines as Moscow wanted to protect its own auto industry.

"By cooperating with local car manufacturers, we are allowed to benefit from favorable tax policies on imported auto parts, which may help to accelerate our expansion in Russia as well as in the east European markets," Su Qingju, a company official told Shanghai Daily.

(Shanghai Daily November 1, 2007)