02
Business
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Manufacturing Attracted by record increases in sales, international
car makers are moving into Europe’s third largest market
Ford Leads Race
on Russia's Roads
car loans almost doubled in plain – poor roads put a
Russia last year.
Facts and Figures
premium on these cars in
Experts believe that, with central Russia, the Volga
this trend now firmly estab- area, the Urals and Siberia.
lished, Russia could overtake 1. The number of cars in Mos- $20,000-$30,000 price cat- Hyundais are favored in
Germany to become Europe’s cow per capita is now as high as egory (346,000) in compari- southern Russia.
largest market as early as in New York. The proportion pro- son with the previous year. Car Prices and preferences are
2008-09. In its recent review duced in Russia is also increas- sales in the $30,000-$40,000 continually changing as most
of the Russian auto market, ing, as leading international and $40,000-$50,000 price of the world’s carmakers go
PricewaterhouseCoopers pre- manufacturers look to open lo- ranges also doubled to reach local in Russia. Ford, which
dicted that over 3.5 million cal plants in ever greater num- 207,000 and 110,000 units, led the way into Russia with
cars would be sold in 2008, bers. respectively. its plant at Vsevolozhsk, has
representing an increase of 2. In 2003, there were 84,700 There were also over 125,000 been followed by Avtotor in
about 25 percent. cars sold in the $10,000- sales of luxury cars priced Kaliningrad and Renault in
$20,000 price range, account- above $50,000. Moscow. Toyota, meanwhile,
ing for less than 8% of the Rus- 4. The Russian car parts mar- has plans to launch produc-
“The vast majority sian market. Over the following ket is estimated at $32.7 bil- tion just outside St. Peters-
of foreign cars are
four years, this percentage shot lion (as of 2007). Analysts say burg, while Nissan, Volkswa-
sold in Moscow: four
up to 43.9%. this market will grow by at least gen, Skoda, Suzuki and GM
times as many as in
3. Last year, there were 20-25% annually over the next are also building plants in
86% more cars sold in the few years. Russia.
St. Petersburg, nine There are currently 22
times as many as in
agreements concluded on the
Yekaterinburg and at
as many as in any other Rus- ple, Chevrolet and Renault industrial assembly of for-
least 18 times as in
sian city. are particularly popular, eign brands in Russia. By
Brand popularity varies re- while in Moscow they do not 2012, it is expected that 1.4
any other city” gionally. Provincial motor- even make it into the top million foreign cars will be
ists, as a rule, choose differ- three. Toyota is also im- rolling off Russian produc-
ent models than Muscovites. mensely popular in the re- tion lines all across the coun-
A survey of car preferenc- In central Russia, for exam- gions, which is easy to ex- try.
-
es among Russians in 2007
showed that demand is by
no means confined to the
lowest-priced models. Un-
Luxury Cars Find Drivers in Russia
like EU car owners, who pre-
ferred to buy B Class mod-
els, Russian motorists The Russian Ministry of Eco- are the first ones supplied. Fer- sia belongs to the top three
PAVEL PETROV_RIA-NOVOSTI
mostly purchased bigger- nomic Development has a to- rari alone sold 55 cars in Russia in continental Europe. Since
sized C Class vehicles (though tal of 23 agreements with car this year. Even this turned out to Rolls-Royce opened its office
In the Soviet era, Russia's The most popular foreign is benefiting from a consum- opting for budget models of manufacturers to build assem- be insufficient, and the manu- here in 2004, sales have more
automotive identity car manufacturer in Russia er boom: In 2007, Russia’s that segment). With incomes bly plants in Russia. Inward facturers increased it slightly, than doubled. Few countries
consisted of just two models today is Ford, which sold al- car market grew by 35 per- growing and credits readily investments have already up to 60 cars. The situation with can boast such results. About
– the Zhiguli (Lada) and most 116,000 cars in the past cent, up to 2.79 million cars. available, buyers are increas- topped $5 billion. Lamborghinis is worse than with 100 Rolls-Royce cars are now
Volga. Now, the nation's year. Ford also leads in the In the same year, Russians ingly eyeing more comfort- In 2008, every other car sold Ferraris: this year we were al- rolling on Russian roads. And
roads are filled with a production of vehicles man- spent exactly half of their in- able, higher quality and pric- in Russia will be foreign made. lowed just 23 cars, and all of there are more Rolls-Royce
bewildering array of foreign ufactured in Russia: its plant comes – $53.4 billion – on ier cars. With a market of this size at them were sold months ahead owners in Russia than that,
cars. Russian consumers are at Vsevolozhsk, just outside cars. Of this, $34.1 billion According to AVTOSTAT, stake, it is not surprising that of time. since Russian buyers are
becoming more demanding, St. Petersburg, currently as- went into buying new im- in 2003, 85 percent of sales the world’s car manufacturers among the most mobile in the
and domestic producers sembles more than 60,000 ported models. were within the $10,000 price are moving in large numbers to ILYA BEREZIN world. They may buy one car
are wondering if they will be cars annually. The Ford That is a normal figure for range. In 2007, the share of build plants in Russia. Director of Mercury Auto, for driving in Moscow and an-
able to hold on to their share Focus has also been ac- developed countries, but for this segment dropped to 26 exclusive Russian importer other in France. Russia has an
of the market as foreign knowledged as the most Russia it was a big change, percent. ELVIRA NABIULLINA of Ferrari, Lamborghini, even bigger potential for future
producers move in. We offer popular foreign model in the welcomed as a sign that the The vast majority of for- Russian Minister of Economic Maserati and Bentley cars growth.
a view of Russia’s automotive country over the past five country is going over to a Eu- eign cars are sold in Moscow Development
trends. years. ropean pattern of consump- – four times as many as are The Russian market is the fast- IAN ROBERTSON,
But Ford is not the only tion. sold in St. Petersburg, nine We are Bentley’s major client in est growing market in Europe. chairman of Rolls-Royce
ALEXANDER KIDENIS
thriving automobile business As car sales increased, so times as many as in Yekat- continental Europe. Our dealers In pure sale volumes, Rus- Motor Cars
MOSCOW in Russia. The entire sector did borrowing to fund them: erinburg and at least 18 times
Business Council As Head of the U.S.-Russia Business Council, Eugene K. Lawson
oping relations between the potential that Russia has to
U.S. and Russia, economic offer as a partner, we will
was recently awarded the Order of Friendship by President Vladimir Putin
forces have moved in. Law- nevertheless continue in
son contended, “I think this these efforts in the hopes that
is an important initiative, we can have a positive im-
CONTINUED FROM PAGE 1 only exposed to the often and although it is only a pact on the way that people
Withstanding the Test of Time
negative news reports in U. small step in educating in this country view our trade
“I think that, overall, U.S. S. media,” said Lawson. Americans about the great relations with Russia.”
-
businesses are optimistic But this may be changing.
about the Russian market. Eugene K. Lawson has been The U.S.-Russia Business In addition to several large
Across the board, American President of the U.S.-Russia Council (www.usrbc.org) is state-orchestrated media
companies have witnessed Business Council since 1993, a private Washington-based campaigns to improve Rus-
Investing in Russia
tremendous growth in Rus- when he founded the organiza- trade association that provides sia’s image in the rest of the
sia and do not see the com- tion along with U.S. Ambassador significant business develop- world, some individuals have
ing political change as being Robert Strauss. ment, dispute resolution, gov- undertaken the task them-
a threat to those growth op- Prior to his work at the Council, ernment relations, and market selves. Eugene Lawson has
portunities,” added Lawson. Mr. Lawson had a distinguished intelligence services to its 300 been one of these: “I conduct-
Both Russia and the U.S. face career in public service, culmi- American and Russian member- ed a U.S.-Russia commercial
an approaching change of nating in his tenure as Acting companies. relations “road show” with
power at the highest level. Chairman and President of the Created in 1993, USRBC’s mis- Mikhail Margelov, Chairman
While Russia’s presidential U.S. Export-Import Bank. His sion is to facilitate member en- of the Committee on Inter-
election has already been de- career has included service as gagement with senior level U.S. national Affairs of Russia’s
cided, the outcome of the Deputy Under Secretary of La- and Russian Government offi- Federation Council, in 2007,
U.S. race is likely to remain bor for International Affairs and cials and to leverage relation- and will be doing so again
a mystery for some time. U.S. Ambassador to the Inter- ships with major industry play- this year. We visited five
“I hope that the impend- national Labor Organization in ers and international finance U.S. cities in five days and
ing political changes in both Geneva. organizations. addressed local business,
countries have a positive ef- FROM PERSONAL ARCHIVES government and media rep-
fect on the commercial rela- resentatives about the reali-
tionship, but recent rhetoric ties of doing business in Rus-
from American presidential lowing the arrest of soul.” Perhaps the last re- country’s presidential elec- sia and the potential that
candidates is worrying,” ar- billionaire Mikhail Khodor- maining hope for improved tion. Russian companies can offer
gued Lawson. While John kovsky, Hillary Clinton re- relations, Barack Obama, ap- “There certainly is a per- for investment in the United
McCain has long been fa- cently rattled Russian audi- pointed a longtime Russia ception gap in this country States.” It seems that while
mous for his proposal to re- ences with her statement that critic, Michael McFaul, as his as to the realities of Russia politicians have failed to find
move Russia from the G8 fol- President Putin “has no adviser and criticized the today. Most Americans are common ground for devel- INFOGRAPHICA RIA NOVOSTI , WWW.VISUALRIAN.RU
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