OREANDA-NEWS. September 29, 2010. Oleg Deripaska's GAZ Group today signed a Memorandum of Understanding (MoU) with China's FAW Group Corp. to establish a joint venture to produce the Chinese company's heavy trucks in Russia.

Announcing the deal, GAZ's Chief Executive Bo Andersson said the joint venture, to be finalised in the near future, would see FAW's trucks produced at the Miass factory in the Urals. The trucks will be fitted with GAZ's new medium-duty YaMZ-530 diesel engine, built at the company's plant in Yaroslavl, and feature technology licensed from leading Western producers. FAW, China's fourth biggest automotive maker, will provide technology and expand GAZ's offering in China.

Mr Andersson said the deal was likely to be 50-50 venture but added that specific investment levels and possible production volumes were yet to be agreed. Mr. Andersson also announced that strong first half results meant GAZ was on track to beat its full-year revenue target of 85 billion rubles (USD 2.76 billion).

Oleg Deripaska, visiting Beijing as part of a delegation led by Russian President Dmitry Medvedev, commented: ‘The memorandum signed today marks a totally new stage of cooperation between Russian and Chinese companies in the machine-building sector. It is especially important to us that ‘GAZ Group' will invest into this equal partnership it's own cutting edge engine technology and products which by a number of characteristics exceed the offerings on the world market today. This prospective partnership between two leading Russian and Chinese OEMs will serve to increase the production and export potential of both companies, lead to a mutually beneficial exchange of experience and know-how while the consumer will receive a modern product at a competitive price.