Reinvest in Russia? Ford Motor Company Says "Da!"

Matthew Guy
by Matthew Guy

After partnering with the Russian company Sollers for the past five years and investing more than $1 billion into car and engine factories, Ford Motor Company is betting on a Russian rebound and still sees the beleaguered country as a long-term play.

Amid GM’s retreat from Russia, Ford stuck to its game plan by spending cash on new models and plants in that country, presumably to avoid a catch-up situation similar to the one it faced in China. According to Automotive News, the commitment paid off in the first quarter of 2016, sending sales up by 93 percent in a market that saw a 17 percent decline over the same period.

The Russian automobile market, once the second largest in Europe, is in a steep decline due to a prolonged recession.

Exporting vehicles from Russia is also an option being kept open by Ford Sollers, thanks to the ruble’s weakness compared to other currencies.

If there’s a shortage of capacity in western Europe, it could create a unique opportunity to boost production. This would be a positive development, as company officials don’t expect a sales gain equal to the massive first quarter jump.

Interestingly, yesterday’s Ford GT announcement included a map of regions where customers could order the $450,000 supercar — eagle-eyed readers will note that Russia is not mentioned. While an expensive halo vehicle will not give Ford the volume it needs in Russia, an argument could be made that seeing GTs on the streets of Moscow would raise the brand’s profile.

Ford started producing five models in Russia last year, including the Mondeo and Transit. The company also makes the Kuga and EcoSport SUVs in Russia.

[Image: Petr Magera/ Flickr ( CC BY 2.0)]

Matthew Guy
Matthew Guy

Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.

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19 of 49 comments
  • Gtem Gtem on Apr 14, 2016

    The Focus is VERY highly regarded in Russia, sometimes seen as a default choice for a reliable family car in the way a Camry is seen in the US. We'll see what the next few years hold in terms of the value of currency, and general health of the economy.

  • Inside Looking Out Inside Looking Out on Apr 14, 2016

    Russia is not Australia. It is a big country with lot of customers who like Fords esp in European part. One my friend bought new Mondeo recently recession be damned. Russians make somehow money and survive severe conditions that westerners would consider to be a полный пиздец.

    • See 2 previous
    • Pete Zaitcev Pete Zaitcev on Apr 15, 2016

      @dal20402 аффтар пиши есчо

  • Sjalabais Sjalabais on Apr 15, 2016

    It's an excellent bet. What goes down, tends to come up. And Ford Europe has been building pretty impressive quality vehicles. I've been trying to invest in Russian index funds, but haven't found anything suitable yet. When the rubel took a dive last year, I thought it obvious that the government would intervene. There was a potential 20% earned within a week or so, but I was to GM-ish to pull the trigger.

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    • RobertRyan RobertRyan on Apr 15, 2016

      @Shawnski Bulk of buyers in Continental Europe go for other Vans. Norway is different to other Continental countries in having a staggering number of EV's, as a result of their Hydro Power, it is pretty cheap.

  • Bpsorrel Bpsorrel on Apr 15, 2016

    Fords will never be looked at in the way Toyota, Nissan and these days, Hyundai and KIA are, but the Focus is well thought of in Russia, in fact several of my Russian family drive or have driven Russian made Focus and haven't complained much about quality. I have a Nissan Qashqai (Rogue to you in USA) in Russia because of the high ground clearance (very necessary to avoid damage!) and the inherent reliability that's also very important there. I've noticed, like in the UK, the trend definately moving towards crossovers and to this end, Ford's Kuga is beginning to do well. Very different market to the rest of Europe.

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    • Sjalabais Sjalabais on Apr 16, 2016

      @Pete Zaitcev So the Hunter is perceived as more reliable - or just easier to repair? From what I've read, it totally wears out enthusiasts across the world by being a constant issue generator.

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