Great Wall Motor Co Ltd has been forced to put off construction of a plant in Russia due to new regulatory hurdles.

The decision came two weeks after Russia's Economic Development and Trade Commission and other bureaus issued a decree that no new plants by overseas car makers would be approved, Xinhua news agency reported, citing Russian media.

"The construction is sure to be delayed," Shang Yugui, spokesman for Hebei-based Great Wall, China's largest producer and exporter of sport utility vehicles, said yesterday.

"We haven't received official notice yet," Shang said. "But we are still negotiating with the Russian government."

Great Wall planed to invest US$40 million to build its sixth overseas manufacturing plant in Russia, with a designed capacity of 50,000 SUVs, sedans and multipurpose vehicles a year. Construction was set to start in the second half of this year.

Other car makers that are expected to slow their expansion plans in Russia include Geely Automobile Co Ltd, Zhongxing Automobile, Chongqing Lifan Automobile Co Ltd and Beijing Automotive Industry Holdings Ltd.

Great Wall said its determination to expand in the Russian market would not be shaken by the new policy and that increased exports would help minimize the impact of the new-plant ban and still allow the car maker to meet rising demand there.

Great Wall's exports to Russia doubled to 8,000 in the first half of this year, and total for the entire year is expected to reach 15,000 units.

"Russia is one of the most promising markets for Great Wall," Shang said.

(Shanghai Daily September 29, 2007)