Daimler Figures Russia Has Pretty Much Bottomed Out, so Why Not Build a Plant?

Steph Willems
by Steph Willems

Russia, the country where Shoviet Shub captain Sean Connery learned to fish, might be on the verge of a modest economic rebound.

After tanking hard in the wake of collapsing oil prices, the country’s rickety economic state prompted many automakers to abandon plans for production growth or pull up stakes altogether. General Motors was a noted casualty, though Lada sailed through the turmoil in fine shape.

Early last year, it seemed as if parent Daimler would head west instead of building a Mercedes plant in the Motherland. However, that’s no longer the case, according to the country’s trade and industry minister.

Daimler will soon sign off on a new plant near Moscow, Denis Manturov told Business World (via Automotive News Europe). Construction on the new facility should begin next year.

Last year, Handelsblatt reported that Daimler’s plan was to assemble 30,000 SUVs a year from kits shipped to Russia. Fierce rival BMW already does the same thing, while Audi taps a local Volkswagen plant for production of premium vehicles. While the global growth rate of the Mercedes brand is double that of BMW, Daimler wants to ensure it stays that way.

According to Reuters, Russian Economy Minister Maxim Oreshkin forecasts economic growth of 2 percent in 2017, assuming there’s no steep slide in oil prices. Daimler want to get its mitts on those extra rubles.

[Image: © 2016 Steve Lynch/The Truth About Cars]

Steph Willems
Steph Willems

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  • Stingray65 Stingray65 on Jan 20, 2017

    Those Moscow girls make me sing and shout, they leave the West behind.

  • Stumpaster Stumpaster on Jan 20, 2017

    Russia's economy collapsed not so much from the oil prices drop, but from the feudal policies ran there since Putin's third term, plus the sanctions for occupying a foreign country's land. The decline started in 2011-2013, March 2014 was just a distraction. For Mercedes the move makes sense. They reach deep into their heritage, back to when they provided their limos to Hitler and his minions. So yeah, in that sense a factory near Moscow makes perfect sense.

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    • Jacob Jacob on Jan 22, 2017

      I think your post is about right. The Russian economy went down since about 2012-2014 primarily because it was too reliant on the mineral exports. In reality, the western sanctions were targeted only at very specific people, such as the ones involved in invading Ukraine territory. So these people couldn't travel to the west any more or obtain western financing for their companies. Those sanctions were really minuscule. But the Russian state used its media machine to place the blame for all of its economic downturn on the USA and its allies because of their sanctions. Average Russian people feel the pain from the economic downturn, but they mostly agree with the state that it was "sanctions"'s fault.

  • Dal20402 Dal20402 on Jan 20, 2017

    Well, it does seem that Russia will be one of the only politically correct trade partners for the United States in the near future (along with the U.K.). With the EU out, China out, and anywhere where the people are brown or black out, there aren't many other options left.

    • OldManPants OldManPants on Jan 20, 2017

      "anywhere where the people are brown or black" Well, we heavily traded with those places once before and got the Old South. Plus the people there are no longer so impressed with rum, textiles, beads or small arms.

  • 3CatGo 3CatGo on Jan 22, 2017

    Ramius was actually Lithuanian, not Russian. Just say'...

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