'If AMUR car factory is not allowed to deal in industrial assembling of cars, we will have to rethink our production strategy. We won’t stop producing cars altogether, but we’ll definitely be making fewer of them,’ the company’s Personnel, Social Issues, and IT Director Grigory Vanshtein said to UrBC.

'I have to say that we won’t be able to reduce the prime cost without the industrial assembling, so this is going to affect our profit and therefore the investments we make in production development,’ he noted.

'To make matters worse, having no permit means we are not going to get extra investments from China,’ Mr. Vanshtein observed.

Problems began when the Russian Federation Ministry of Economic Development and the Russian Federation Ministry of Industry and Energy decided to put off signing contracts on assembling Chinese cars in Russia until September 15, 2007.

The two ministries are reluctant to sign the agreements before mid-September since the assembling scheme proposed by these agreements allows for a duty-free import of car parts, which is actually against the WTO regulations.

According to Kommersant newspaper, this uncertainty questions the future of four projects currently considered by the Ministry of Economic Development: the prospective construction of Great Wall (a Chinese concern) car factory in Tatarstan, assembling of Geelys and ZhongXings and Lifan cars at a Sverdlovsk Region-based plant and at Cherkessk-based Derways, respectively, and production of BAIC utility trucks in Ulyanovsk Region. These four projects are expected to result in 230,000 cars a year altogether and require $385 million worth of investments.