The European unit of General Motors Company (NYSE:GM) said Thursday it will begin car production in Belarus beginning in 2014.
James Bovenzi of GM Russia and Dmitry Egorov of Unison JSC in Belarus and the UK signed a framework agreement Thursday to assemble Opel's Corsa models at Unison's plant in Minsk.
The vehicles will be sold in the car markets in Russia, Kazakhstan and also Belarus. Opel Vice President of Manufacturing in Europe Peter Thom said in a statement that the company's guiding principle is to "build where we sell."
The agreement is valid through 2017 and the goal is to assemble 7,000 Corsa units in the first year of production. The agreement includes an option to add further models.
The Belarus plant's role in the supply chain will be to complete the Corsa models from partially assembled components or so-called semi-knocked-down kits delivered from associated facilities in Eisenach, Germany, and Zaragoza, Spain.
"The delivery of assembly kits to an expanding market means more business for our facilities in Eisenach and Zaragoza," Thom said.
Distributed assembly is also a common and inexpensive way for carmakers to circumvent import duties.