Russian Automotive Industry Growing
OVERALL AUTO production in Russia grew by 6.7 percent in the first half of this year, partly due to foreign investment. Just 7 percent of cars produced in Russia are built by companies with foreign capital, but production of foreign-branded vehicles grew by 30 percent in that timeframe.
“The market share of foreign plants on Russian soil, such as Ford and Chevrolet-Niva, is growing.” Russia’s industry minister Viktor Khristenko reported on the Kremlin website. “Last year, 128,000 cars were assembled in Russia and this year we expect about 18,000.”
Khristenko has called for the proportion of cars built with foreign capital to be increased by two and a half to three times by 2008. Other foreign companies with production facilities in Russia include Renault and BMW, and a factory in western Russia’s Izhavto region recently launched assembly of Kia Spectra cars undera 2003 agreement containing plans for production of 8,00 of the vehicles by year’s end, 25,000 next year, and 40,000 in 2007.
Toyota is in the process of building a factory in Russia, and DaimlerChrysler and Volkswagen also plan to build factories there.
Copyright Halcyon Business Publications, Inc. Oct/Nov 2005
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