After Some Prodding, World's Automakers Rush To Russia

Bertel Schmitt
by Bertel Schmitt

The Russian government offered foreign automakers a deal which would be very costly to refuse: Invest heavily into the Russian auto industry, and Mother Russia will let you import parts and components at negligible or zero duty rates. Present your plans no later than July 1. Miss the deadline, and you may as well kiss the Russian auto market good-bye. Ti ponemaesh?

“Yes, Sir! We understand!” is the chorus from the world’s automakers. “Global automakers are keen to tap the growing market, for which one estimate has it that sales will expand to 3.5 million units in 2015,” writes The Nikkei [sub].

Dmitry Levchenkov, head of the Department of Special Economic Zones at the Ministry of Economy presented a list of first responders:

  • Italy’s Fiat plans to invest US$1.1 billion in the next four years to build an assembly plant with an annual capacity of 120,000 vehicles and an engine plant in the country.
  • GM plans to invest US$1 billion to expand its existing capacity in Russia over the next three years.
  • Ford’s joint venture with Russian auto maker OAO Sollers plans to spend US$1.2 billion to construct three plants in Russia.
  • Volkswagen will invest US$900 million to expand its existing plant and build an engine plant.
  • Also on Levchenkov’s list were Russia’s AvtoVAZ, its 25 percent shareholder Renault and alliance partner Nissan. No investment sum was given. Today, The Nikkei [sub] says that Nissan and Renault will invest up to 2 billion dollars in Russia through 2015, via its AvtoVAZ connection.
  • Russian truck maker Kamaz and Daimler are also on the list.

Expect more announcements before the July 1 deadline.

Join the conversation
  • M 1 M 1 on Jun 03, 2011

    It's a pretty short boat-ride from Japan to Eastern Russia, and they just built that fancy new highway from coast-to-coast. Time to start selling some heavy-spec road-train car-haulers to my Russian buyers!

    • Inside Looking Out Inside Looking Out on Jun 03, 2011

      How highway can be fancy - you mean it is passable? It is important to have railroad running alongside because if your car breaks down (Russian cars do it very often) you will need to walk several hundred miles in best case scenario to find a phone and if you are not lucky - you will do it during famous Russian winter which stopped the whole German army (which marched over Europe non-stop before that)and which lasts 8 month a year. Forget about cell phones too.

  • Vvk Vvk on Jun 03, 2011

    Instead of foreign sounding "Ti ponimaesh'?" it would be better to say "Yasno?"