A lot of "ifs" surround Bulgaria’s latest attempt to forge its own car industry by building a motor vehicle assembling factory near the town of Lovech. The plant is supposed to fulfil an old Bulgarian dream of putting the country on the car manufacturers’ map along with neighbouring Serbia and Romania, although, technically, the Lovech plant will assemble rather than manufacture cars.  

So far the project is only at the planning stage but the omens are positive given the strong backing from central and local governments. When, at the end of 2008, it was announced that the Chinese Great Wall company was interested in opening an assembly plant in the central Bulgarian town many thought that it was just a media stunt. Interest heightened, however, when it was revealed that shareholders in Litex Motors - the company owner of the future plant – were local businessman Grisha Ganchev (92 per cent) and Corporate Commercial Bank (eight per cent).

Ganchev is often described as one of the wealthiest Bulgarian businessmen. Despite some controversies in the early and mid 1990s he has managed to keep out of the public spotlight mainly because he is based in Lovech, not Sofia, where he also owns the local football team. His businesses interests, developed by Litex Commerce, which was set up in 1990, are mainly in the petrol trading, energy, food, transport, tourism, finance and real estate sectors. According to the company’s website, it is one of the largest investors in the country with a total investment exceeding 180 million euro. In 2007 Litex owned assets of more than 220 million euro, employing more than 1500 people.

Building cars, however, is of a completely different order to natural juice production, for example, hence the information about Great Wall’s interest in Lovech was neglected by most media in Bulgaria. When Prime Minster Sergei Stanishev met with Great Wall representatives in December 2008 it was announced that initial investment in the co-project - between Great Wall and Litex Motors - was expected to reach 80 million euro and create 1500 jobs, double the number Litex employed in 2007. According to Ganchev, however, overall investment might reach more than 300 million euro. The ambitious plans involve opening the plant within 18 months and hiring more than 400 specialists from Germany, Japan, South Korea, China and Italy.  

Despite negative projections for a tough year Litex kept on pushing the project and on April 9 2009 the two partner companies signed the contract to build the plant. "We managed to win the deal in competition with Slovakia because of low taxes. I admit that the initial idea was to build it near a sea port but in the end local patriotism prevailed," Ganchev was quoted as saying by Bulgarian-language Trud daily after the signing. Whether Bulgarians will display the same patriotism by buying Great Wall’s cars given the unfavourable reputation of Chinese goods remains to be seen. Ganchev seemed unperturbed that Corporate Commercial Bank decided to withdraw from the project on March 31 by selling its shares in Litex Motors to Automobile Produce company for 1.4 million leva.

Indeed, at least in theory, Ganchev has little reason to worry because the motor vehicles emanating from the plant will belong to the so-called low price segment, seen by many as the answer to the world automobile industry’s problems amid the ongoing economic crisis. Great Wall’s models in Bulgaria are expected to cost between 6240 euro and 12 000 euro, a good price for a brand new vehicle by any standard. This, however, is the price of an average four to six year-old sedan made in Western Europe sold on Sofia’s second-hand market. With prices of second-hand cars going down and dealers of brand new vehicles offering more and more favourable leasing conditions in search of clients, it will be interesting to see how the price of Great Wall’s cars will rate 18 months from now.