Russia’s GAZ Group will start to assemble vehicles in Vietnam, according to Maxim Akimov, head of the Russian Intergovernmental Commission of the Russian Federation and Vietnam on Trade, Economic, Scientific and Technical Cooperation.

“The issue of cooperation in industry, including the assembly of automobiles from sets of machinery components in Vietnam, are agreed with the Vietnamese side,” Alimov was quoted by New.ru as saying.

He also noted that 300 sets of machinery components are being transported by sea to Vietnam.

Kristina Dubinima, sales director at GAZ International LLC in Asia, said in an interview with the Vietnam Economic Times that GAZ researched Vietnam’s market in 2016 and 2017 and late last year and this year participated in two exhibitions on the country’s automotive industry, to study customers.

“We have also conducted trade promotion activities in Vietnam and will start selling our products in the country this year. We plan to establish a joint venture with a Vietnamese company to benefit from import tariffs on spare parts and imported automobiles of zero percent.”

GAZ will also transfer technology and localize components in production. The group expects to benefit from the Vietnam-Eurasian Economic Union Free Trade Agreement (EAEU FTA) signed in 2016.

From Vietnam, which has signed many FTAs that are beneficial for companies like GAZ in the country, GAZ can export vehicles to other Southeast Asian countries.

“As a manufacturer of commercial vehicles in Russia, GAZ is targeting Vietnam as a key market in the ASEAN region and it is also a key, long-term market of Russian automotive companies.”

According to Izvestia’s report earlier, GAZ plans to set up a joint venture with Vietnam’s Thanh Dat Group to assemble vehicles in the Lien Chieu industrial part in the central city of Danang.

Kamaz, the largest truck manufacturer in Russia, also plans to launch a serial assembly of trucks at the company’s plant in Vietnam in 2020. At the first stage it is planned to assemble at least 1,000 cars a year. The volume of investments will reach up to $10 million.