France-Russia Automotive
N° 8
December 2009
Price : 10 € TTC
France-Russia Automotive (Auto Franco-Russe) is an economic newsletter focusing on the development of the Western automotive groups’ business in Russia. France-Russia Automotive is distributed both on paper and electronically. To receive the next issues for a free trial you only need to subscribe on our website: www.autofrancorusse.fr. France-Russia Automotive is published by Agence du Fil SARL Company, whose publications are devoted to the Franco-Russian trade.
EVENT
RENAULT AND AVTOVAZ AVOID A DIVORCE
Despite their differences, Renault and the Russian government are working together to avoid the threat of bankruptcy that hangs over Avtovaz. The French company will provide the technology and the Russians the money. The 'French plan' to reform the company has been re-launched.
A visit to France by Vladimir Poutin, the Russian
Prime Minister, in November 2009 did not produce the desired solution to
the conflict over Avtovaz. Despite pressure from the Russian government,
Renault stuck to its guns. The French company will not contribute to the
bottomless pit of Avtovaz's finances where it is a shareholder.
Renault bought 25% + 1 share of Avtovaz in February 2008.
Rosstekhnologii, a public holding, and Troïka Dialog, an investment
bank, are the other two main shareholders in the company with the same
number of shares. The rest is quoted on the stock market. The French
company spent over a billion dollars in this operation. Avtovaz is the
leading Russian car manufacturer and produces over 700,000 cars per
year. Its sales revenue was 6.2 billion dollars in 2007. The factory has
both car assembly and internal manufacture of some of the components and
employs 105,000 people. However, the cars being assembled show their
age: the basic Lada is over thirty years old and, with its different
modifications, it still accounts for a quarter of the factory's output.
The joint working plan involves sharing sectors of competence. The
French will manage the company's reform, its organisation, its
processes, its technologies and its models. Twelve Renault managers
joined the Russian company's senior management team. Three of them are
in the purchasing and supply department which Avtovaz managers admit in
private to be a place that is notorious for corruption.
The Russians retain control of human resources and 'political' relations
between the company and its regional and national environment. There is
the possibility that some of the 105,000 employees who can not stay in
their current positions will have to be redeployed. “The social aspects
are being managed by Avtovaz's Russian management” affirmed Yann
Vincent, Avtovaz General Manager at the time.
The trend reversed in spring 2009. The French managers were asked to
leave the company, no longer required to work on a major overhaul of
Avtovaz. Did the planned reforms start to limit the interests of some of
the local bigwigs as the rumors suggest?
Another possible explanation is that the 'French plan' was incompatible
with the Russian State policy which wanted to retain all the employees
whatever the cost. Avtovaz and its 105,000 employees provide a living
for the 720,000 residents of Togliatti, a town that is fully dependent
on the car factory. There are also the suppliers and several of these
are located near the factory in the Togliatti-Samara region. The State
did not want to increase social tension in this region that has already
suffered severely. So it's exit the French plan, or at least for now,
replaced by the staff retention plan.
In parallel, Boris Aleshin, who is considered to be the author of the
reform programme, has been ousted as Avtovaz Chairman. He has been
replaced by Igor Komarov, a senior Russian civil servant, an outsider.
At the same time, Avtovaz's sales have collapsed due to the crisis:
169,000 cars in the first six months of the year compared to 378,000 in
the same period in 2008. Avtovaz has reported nearly 650 million dollars
of losses in the first six months of 2009. Several times, the factory
was almost declared bankrupt. Suppliers have not been paid for several
months and some had stopped making deliveries to the production line,
which was often stopped anyway. The State had to provide cash to avoid
bankruptcy. The State's successive cash injections have increased the
debt which will be about 2.5 billion dollars by the end of 2009,
excluding the unpaid supplier accounts. According to our information,
this money has all been used to maintain employment and to eliminate
some of the unpaid supplier accounts.
Staff reductions
At the end of summer 2009 Avtovaz announced that a plan to reduce its
excessive staff, which is currently102,000 employees, was being
prepared. The plan aimed to eliminate 27,000 positions. It got a bad
reception from the government and the company had to reduce the number
of redundancies to only 5,500 people. However, a document produced by
the Industry Minister provides another perspective on the urgent
measures: 55,000 redundancies are required to make Avtovaz competitive.
It requires another 2 billion dollars of support in addition to that
which has already been provided to keep the company afloat. This money
is to pay supplier debts, which are estimated at 350 million dollars,
finance redundancy costs and develop and start production of new models.
The 2009 sales forecast is 3 billion dollars. And Avtovaz is expected to
report a loss of nearly a billion dollars. Unsurprisingly, the company's
value has collapsed. Renault's holding in Avtovaz, bought for over a
billion dollars at the start of 2008, was worth only 166 million dollars
in autumn 2009.
It was in this morose climate that Vladimir Poutin decided to threaten
the French partner. In October 2009, he declared that “Renault must
contribute to our financial effort or its share of Avtovaz's capital
will be diluted”. The Prime Minister wanted 500 million dollars more
from the French company. In addition, he required that Nissan contribute
to saving Avtovaz. The affair made a lot of noise. The Russian
government has since reviewed its demands. It still requires money but
now offers to increase Renault's holding in Avtovaz, even offering it
the majority share. It was this proposition that Poutin wanted to
negotiate with François Fillon, the French Prime Minister, at Paris at
the end of November 2009. In exchange, he asked for new money for
Avtovaz and a share in Renault for the Russian State.
Renault will not make any payment
This latest negotiation did not produce the expected results. Renault
will not make any payment and its share will not be changed, at present.
The Russian government's new financial support will be through an
increase in the capital in the public holding, Rosstekhnologii, which
will loan the money to Avtovaz. Nevertheless, the partners have made
progress with the issues. Renault will contribute to the rescue plan by
providing its Russian partner with the technology, equipment and
platform for a new range of cars. The models will probably be developed
from the Logan which is already enjoying great success with Russian
motorists thanks to it being assembled at Avtoframos, a Renault
subsidiary at Moscow.
This new support is estimated to be worth 240 million Euros. This was
negotiated when Renault first bought a share of the Russian
manufacturer. It was intended that Avtovaz purchase this package from
Renault for a similar amount. Now that the renewal of the range has been
agreed, there remains a dispute about payment for licenses. In addition,
Renault will contribute to the creation of subsidiaries intended to
externalise production of some components which are currently made by
the company. These subsidiaries will allow some of the factory's
employees to be re-employed. It is, once again, the implementation of
the subsidiary plan conceived by Yann Vincent, Avtovaz"s past General
Manager (see Auto Franco-Russe No.7).
The 'French plan' has ended up being approved at the highest level,
between the Russian and French heads of government. Now all that is
required is to find the teams needed to orchestrate the reform of this
giant Russian car company. We can expect to see the Renault managers
returning to Avtovaz quite soon.
A PROJECT FOR A NATIONAL HOLDING IN THE MOTORCAR SECTOR
Given the perspectives for Avtovaz, Rosstekhnologii managers have also developed a plan to consolidate several local motorcar sector companies into a national holding. The project plans to transfer the Rosstekhnologii holdings in Avtovaz (25%), Kamaz (37.8%), Avtodiesel, GAZ's engine plant (30%) and the Tutaevski Motorni engine plant (32%) into Rossavto. The Gaz management quickly rejected this proposal. The project was reduced to an alliance between Avtovaz and Kamaz. One produces cars and the other trucks which made sector experts doubtful as to the benefits of such and alliance. Despite this, Serguei Kogogine, Kamaz General Manager, joined the Avtovaz board during an extraordinary shareholders meeting at the end of November 2009.
AVTOVAZ IS IN DISPUTE WITH LOCAL COMPONENT MAKERS
Avtovaz's managers are looking for
suppliers for their future models. Their preference is now for western component
companies. The factory currently imports 24% of its purchases: components, raw
materials and materials, according to comments made by Damir Kashapov, the
company's vice-president of purchasing, in an interview with the local press.
The share of imports could grow to 70 or 80%. At the same time, management wants
to reduce the number of suppliers. They want to reduce the current 800 to 50 -
60, according to the same source. The preference for western suppliers is said
to be due to the poor quality of local manufacturers: according to Mr. Kashapov,
his department detects defects rates of nearly 10% for several Avtovaz
suppliers.
This anti-crisis plan is likely to face problems due to political
considerations. The local suppliers provide employment that supports tens of
thousands of employees and their families in towns hit by the crisis as in the
Samara region where Avtovaz is located.
For their part, local component manufacturers are not rushing to obtain
contracts for which payment is not ensured. Sibur Russian Tyres stopped
supplying Avtovaz at the end of 2008, when it obtained a judgement against
Avtovaz ordering it to pay outstanding invoices immediately. Avtopribor, a
producer of on-board electronics, announced in November 2009 that it was
stopping deliveries to Avtovaz due to the accumulation of unpaid accounts. It
now requires that the company pay in advance.
LADA SERVICE REORGANIZATION IS STALLED
An attempt to reorganise Lada Service, the Avtovaz dealership network, appears to have failed. The management of this autonomous entity which is owned by Avtovaz, wanted to change all the 76 dealerships into a national multi-brand network. The plan was to diversify with the aim of having Avtovaz vehicles account for 50% of sales, compared with 98% currently. It also projected opening the capital to finance the transformation. This is where Avtovaz used its veto to retain control of the structure that currently accounts for 25% of its sales. Alexandre Pronine, Lada Service Chairman, resigned following the shareholder's decision. Avtovaz may make an internal appointment to replace him.
NEARLY 7,500 CARS HAVE DISAPPEARED
An internal enquiry at Avtovaz has discovered that 7,459 cars, worth almost 50 million dollars, have disappeared. They were produced between January and October 2009 and disappeared somewhere between the factory and the dealers or after delivery, according to company management.
GM REFUSES TO SELL OPEL TO THE RUSSIANS, GAZ PENALIZED
The deal for Canadian component maker Magna to buy
55% of Opel in association with the Russian state bank, Sberbank, will
not be concluded. It was GM, who own Opel, which decided not to sell the
German brand. This provoked astonishment and even anger amongst German
civil servants who thought they had found a buyer. The Russian reactions
were almost identical as this proposition had been intended to restore
life to Gaz, the country's second biggest car manufacturer.
However, GM's about turn has allowed all the partners to escape from a
difference in scale. The potential purchasers hoped to obtain the
financial support promised by the German government to the future Opel
owner which was planed to be worth up to 4.5 milliard dollars provided as
grants and bank guarantees. At the same time, the potential buyers did
not try to hide the fact that they intended to close some or all of the
European factories and transfer the production to Russia, to Gaz at
Nijni Novgorod. According to Magna, almost 4,000 employees would be made
redundant in Germany. GM's refusal to sell has dealt with this problem
before it became a political hot potato.
Magna has looked after the interests of Gaz, its special partner and
ex-shareholder, in this affair. The Russian Machines holding owned by
businessman Oleg Deripska, Gaz's owner, has owned 18% of Magna since
2007. It lost this holding in autumn 2008 following a margin call by the
banks that had financed the initial purchase. However, the partners had
had enough time to develop a relationship based on trust. Magna has
wanted to build a components factory at Nijni, near the Gaz factory, for
some time. When Faurecia left the joint venture with Technoplast, who
produces plastic parts at Nijni, Magna bought its shares.
As for Gaz, where sales were 5.8 billion dollars in 2007, it is still
looking for a new model it can produce. Its plan to assemble the old
Chrysler Sebring model under its own brand of Siber was a commercial
failure. The Siber sales price proposed by Gaz was considered to be too
high for this car which was already showing its age and sales were
almost zero. Gaz lost no less than 150 million dollars in this episode:
the price it had paid for buying the factory and the licenses but not
including the cost of transferring the factory to its Nijni site.
Gaz had great hopes that the transfer of the Opel technologies would
allow it to launch new models. It appears that this possibility had an
influence on GM's decision. The US company had just invested in building
a factory at Shushari, near St Petersburg. It started operating in
spring 2009 and has a planned capacity of 70,000 cars per year. GM would
not have wanted to help a local competitor with its own models on a
market where intellectual property is not always adequately protected.
However, GM does not exclude contributing to the efforts to modernize
Gaz but as a direct participation, according to its statements.
TAGAZ IS ACCUSED OF INDUSTRIAL SPYING
Controversy accompanied the launch of the new model
from Tagaz. It was named the C100 Vega and this saloon should have been
assembled in its Taganrog factory in southern Russia using kits provided
by the Tagaz Korea subsidiary who ordered the parts from Korean
manufacturers. However, the C100 looked very much like the GM-Daewoo
Chevrolet Lacetti including some of the fine details. Such was the
similarity that GM is suing. The enquiry points to what seems to be a
case of industrial spying. Three Daewoo employees were recruited by
Tagaz Korea between 2006 and 2008 and appear to have left their former
employer taking documents about the Lacetti with them. Almost 6,000
files were copied. The investigators appear to have discovered who is to
blame: two Tagaz Korea managers who transferred from Daewoo have been
arrested and a third has committed suicide. In October 2009, the Seoul
courts agreed that piracy had occurred and ordered Tagaz Korea to cease
its business of making the kits and parts for the C100 Vega.
In defiance of these accusations, Tagaz had organised the launch of 'its
new model', the C100 Vega, at Red Square in Moscow at the end of October
2009. It was positioned in the 12,000 to 15,000 dollars price range and
would have competed with the Avtovaz models according to local experts.
Except that the market for locally designed vehicles has not been able
to recover from the crisis. The new Tagaz model may not be able to
impose itself especially if deliveries of assembly kits are blocked by
the Korean courts.
The Tagaz factory was built in 1997 and has already tried various
assembly projects, including models from Daewoo and Citroën, which were
sold under its own Doninvest brand. In 2001, Tagaz established a
partnership with Hyundai for whom it now assembles several models.
Nearly 106,000 vehicles were assembled by Tagaz in 2008 and two thirds
of them were the Hyundai Accent according to company statements. The
partnership is threatened by Hyundai plans to build its own factory in
Russia near St Petersburg.
During this time, Doninvest the holding that owns Tagaz, found itself
accused of contract violations by the Chinese company Chery. Ruslegavto,
a Doninvest subsidiary, had received 6,000 assembly kits for the Chery
Tiggo in 2008. According to the contract, the Russian partner should
have assembled and delivered the vehicles to the Chery distribution
organisation in return for payment for its services. However, Ruslegavto
has only delivered hundred vehicles and sold the rest for its own account
via Tagaz dealerships. The Chinese company is claiming payment by
Doninvest but without success, so far. Their partnership appears to be
faltering at present.
Doninvest, which owns the Tagaz factory, is, in its turn, owned by
businessman Mikhaïl Paramonov. He is a parent of Vladimir Tchoub,
governor of the Rostov region where the Taganrog factory is located. The
close ties between these two men ensure that the Doninvest bank, which
is part of the holding, has the official title of 'bank mandated by the
regional government'. The Tagaz factory receives significant fiscal and
financial support from the regional and federal government. In 2009,
interventions by Tchoub helped Tagaz restructure its debt of nearly 800
million dollars with the banks.
THE CRISIS HAS LED TO A REDISTRIBUTION OF MARKET SHARES FOR TYRES
Has the crisis caused a redistribution of market
shares for tyres? This is what the local players were claiming when we
met them during the MIMS show at the end of August in Moscow. “Nokian,
Michelin, and partly Continental… no longer have such large market
shares as they had a year ago. They can no longer hope to get them back"
stated Alexander Belyak, General Manager at Sever Avto, the wholesale
and retail tyre company that is one of the market leaders. According to
Mr. Belyak "consumers have switched to other brands, mainly Korean and
Japanese. Look at our stand; we are promoting the Hankook, the Kumho...
These tyres have the same quality as the western brands; consumers can't
go wrong with them. And these brands offer financial conditions that are
much better those of western tyre companies."
A manager from a local tyre manufacturer who wished to remain anonymous
confirmed: "Imports for the tyre market have fallen drastically and do
not appear to be recovering. During a few months of the crisis, imported
tyres continued to sell partly by inertia and due to annual contracts.
But now, imports have collapsed whilst the market shares of local
manufacturers are increasing.
During the first half of 2009, the whole tyre market fell by 45%
compared to the same period in 2008. This was due to a fall in the
transport market of 25 - 30% which was itself the victim of the fall in
the construction sector.
The current rise in consumption is mainly due to the aftermarket.
Consumers are looking for the cheapest products and this applies not
only to private consumers but also to the transport sector. It is the
consumers who are used to the premium segment that account for the rise
in segment B."
How long will it take for the tyre market to return to its pre-crisis
vigour? Local analysts moderate their optimism According to them, the
2008 sales will not be reached again before the end of 2010.
PRODUCTION FALLS BY ALMOST TWO THIRDS
The cumulative production of cars, trucks and buses
of all brands was 341,500 units for the first 6 months of 2009 according
to ACM Holding. This figure had reached 903,300 during the first 6
months of 2008 and is a drop of 62%.
The number of cars assembled under western brands during the first 6
months of 2009 was only 47% of the level for the same period in 2008.
Local brands had a greater fall and their production level was only
34.9% compared to 2008, according to ACM Holding.
Other sources quote a figure of 484,800 cars of all brands being
assembled between January and September 2009. This figure also includes
230,058 units assembled by western brands.
Truck production was 39,300 for all brands during the first 6 months of
2009. This figure was 70,416 for the period from January to September
2009.
Western truck assembly plants in Russia produced 2,878 units during the
first 6 months of 2009 compared to 5,838 in 2008, a fall of almost 50%
on average, according to ACM Holding. The results vary greatly depending
on the brand. The Japanese company Isuzu in partnership with local
company Sollers assembled 1,934 vehicles in the Yelabouga factory at
Tatarstan during the first 6 months of 2009 compared to 2,582 during the
same period in 2008.
Hyundai assembled 671 Porter vans in the plant owned by local company Tagaz at Taganrog, compared to 2,391 in 2008. Volvo assembled 121 in its
Kalouga factory compared to 272 in 2008. Iveco assembled 79 vehicles
with its partner UralAZ at Tcheliabinsk compared with 196 during the
first 6 months of 2008.
The latest statistics report 5,220 western brand trucks being assembled
between January and September 2009.
THE MARKET HAS FALLEN BY HALF IN ONE YEAR
Sales of cars and commercial vehicles of all brands
were 1,338 million units for the first eleven months of 2009 according to the
Association of European Businesses. This is a reduction of 50% compared
to the same period in 2008. Over 105,302 units were sold during November
2009 which is 46% less than in November 2008. These AEB statistics
include both local and western brands and vehicles assembled locally or
imported.
Avtovaz is still the leader in terms of sales with about 320,000 Lada
sold during the first eleven months of 2009. It is followed by Chevrolet
(95,100), Ford (75,078), Hyundai (66,721) and Renault (66,018). Toyota,
Kia, Nissan, Gaz and Daewoo follow them.
As the markets have become a bit more stable, these figures for eleven
months are a good indicator of the future annual results with a pro rata
correction. This is especially true in terms of the sales dynamics:
almost every major company will report reductions of 45 - 65% for the
year. The notable exception is Renault where eleven month sales are only
falling by 34% mainly due to the success of the Logan where this low
cost model has proven very popular during this crisis period. Kia
reports only a 26% fall despite stopping assembly by the bankrupt
Izhavto.
Volkswagen has a moderate fall in sales of 19% and has sold 36,471 cars
during the eleven months. This does not include Skoda: it sold 30,089
units over the eleven months which is a drop of 34%. However, the
company's Kalouga factory only became operational at the start of 2008
so it is not useful to compare the results with last year.
Peugeot sales fell by 37% and are only 27,750 units for the eleven
months of 2009. Citroën have increased slightly but volumes remain low
with 11,315 units sold in the first eleven months of 2009.
Sales in upper segments have also varied between the brands. Sales were
down by 13% for BMW who have still sold 14,606 cars. Down by 29% for
Mercedes, down by 39% for Porsche, down by 42% for Jaguar but, in
contrast, up by 74% for Hummer – but this relates to sales of less than
1,000 cars for the year.
www.aebrus.ru
IN BRIEF
Audi hopes to reach sales of 15,000 vehicles
in 2009, according to press releases. The company plans to double its
sales in Russia by 2015.
Daimler Trucks has signed a head of agreement for developing the
assembly of Mercedes trucks in the factory owned by local company
Kamaz at Tatarstan. It involves assembling from pre-assembled
blocks delivered by the company and could start in January 2010.
Mercedes trucks may then use the Kamaz dealer network to
distribute them. Daimler already owns 10% of Kamaz and has
just asked the federal monopoly commission for its authorization to buy
another 5%. The Russian company is counting on this joint venture to
keep some of its workers busy and thereby avoiding a prolonged period of
short time working. Its factory has only been operating one week per
month since January 2009 as orders for its trucks have collapsed. Things
improved slightly in October allowing it to start working a four-day
week. The Kamaz factory produced 47,500 trucks in 2008. Its
income was 3.7 billion dollars in 2007 and 3.0 billion in 2008. It
dropped to 1.28 billion for the 9 months from January to September 2009.
The company has announced a loss of 144 million dollars for this period.
Mitsubishi Corp has bought 40% of Rolf Import, the local
Mitsubishi Motors dealer, for a price of 72 million dollars paid
now and up to 128 million more if future results are good. The Rolf
Group, which owns Rolf Import, is the leading distributor of
foreign brands and is trying to restructure its debt which exceeds 500
million dollars.
Porsche is negotiation an option to locate an assembly site at
Moscow on land owned by the AMO-ZIL truck factory which is
forecast to close. The factory has lost money for many years and has
been kept afloat by the Moscow town hall, its main shareholder. Its
production was 1,600 units during the first ten months of 2009.
Local company Sollers has just received the credits from
Vneshekonombank for its partnership with Japanese company Isuzu.
The project plans to build an Isuzu truck assembly plant at
Vladivostok in a disused navy factory. This factory was initially
planned for the Sollers site in the Tatarstan free zone on the
Pacific shore to shorten the supply chain from the Japanese Isuzu
factories and to obtain financial support under a government scheme to
help factories locate in the Russian far east, badly hit by the
recession. Bet won. The planned factory will employ 700 people with the
possibility of increasing this to 2,000 people after 2011. Sollers
has not excluded the option of relocating production of the Korean
SsangYong and the Fiat Ducato, currently assembled in
Tatarstan, to this site.
The GM factory at St Petersburg stopped production during July
and August 2009 in response to the lack of sales. It restarted on
September 1st when it started assembling a new model. The Chevrolet
Cruze (alias the Daewoo Lacetti) has joined the Chevrolet
Captiva and Opel Antara, which have been assembled at Shushari
since the spring of 2009. Assembly of the Opel Astra is planned
for spring 2010.
Audi, Citroen, Kia, Land Rover and Skoda came out as being
popular with dealers in a recent satisfaction survey conducted by
Ernst & Young for the Russian Automobile Dealers association
which has 60 local dealers as members. Audi was recognised as the
best for the quality of its after-sales service whilst Citroen
scored well for the quality of its financial relationships with dealers.
Chinese company Eco Concept has bought the British company LDV,
a bankrupt subsidiary of Gaz. The company was bought by Gaz
in 2006 and made Maxus vans. Its factory at Birmingham has been at a
standstill since end 2008. Gaz's attempts to find a buyer failed and
LDV was declared bankrupt in June 2009. Creditors are expected to
lose almost 80 million Euros in this affair.
The bankrupt Izhavto production plant has been placed under
judicial protection until March 2010. This period may end with the
company being liquidated. Management talks about projects to restart
assembly of Kia models but the Korean company has not yet shown
any interest in restarting their collaboration. Izhavto assembled
59,300 cars in 2008 and half of them were Kia. The company has
accumulated over 400 million dollars of debts including 280 million with
the public bank Sberbank.
The Russian government wants to start a scrap vehicle bonus
scheme. This programme concerns vehicles over ten years old.
According to the first official announcements, their owners can benefit
from a 1,700 dollar cheque that can be used against the purchase of a
new local or western brand vehicle assembled in Russia. Over half the
cars in Russia are over ten years old. However, there is a shortage of
industrial infrastructure for recycling them.
Pirelli and the public holding Rosstekhnologii have
announced that signature of a new heads of agreement for the creation of
a joint venture to produce tyres in the Togliatti region. The factory is
intended to produce 4.2 million car and truck tyres. It will employ
1,500 people. The site has not yet been finalised and is waiting for the
new free trade zone to be created near Togliatti, next to Avtovaz.
Work is not likely to start until the end of 2010. This is not a new
project as Pirelli has already signed a heads of agreement with
Rosstekhnologii (see AFR Nos.5 & 6) also for the planned
technology park at Togliatti where work has not progressed since.
Yokohama is getting ready to start building its new factory in
the Lipetsk in southern Russia. The site should be operational in two
years and have a production capacity of about a million tyres with the
option of expanding. The company has chosen a local presence to attack
the factory fitted market of the Toyota and Ford Russian
factories. "Our products are mainly linked to motor sport by Russian
consumers. Will they readily accept them for their cars?" questioned the
Yokohama managers who intend to target primarily the young who
are aware of motor sport. They intend to sponsor sport at Lipetsk in
order to develop the company's image with potential employees and with
the regional government who may provide different advantages for their
installation.
Local tyre company Nizhnekamskshina has started to market the
first all-steel truck tyres produced by its project with German
company Continental. The first tyres to leave the factory were
22.5 inch tyres and are intended for the locally designed Kamaz
trucks.
The number of new cars imported in 2009 will be less than 27% of
those registered in 2008, according to the Federal Customs Service.
The crisis and the increase in import taxes at the start of the year
have ravaged their sales.
The application of the Customs union with Byelorussia and Kazakhstan
on January 1st 2010, may create a new flow of second-hand cars
coming from or transiting via Byelorussia which separates Russia from
Europe. Direct imports of second-hand cars have decreased considerably
since import taxes were increased at the end of 2008. The implementation
of compulsory health checks on second-hand vehicles when clearing
customs, aimed at 'detecting insects that could be harmful to
agriculture', strengthened the protectionist barriers in summer 2009.
However, this measure is now contested by the monopolies commission.
The government is planning to increase the tax on GPS systems:
customs taxes may increase from the current 5% to 25%. This applies to
GPS receivers for cars; those in mobile telephones are not
affected, at present. The aim is to encourage the development of
navigators using the Glonass system, the national positioning
system. Currently, Glonass hardly covers Russia due to a shortage
of satellites.
MILESTONES
Down 71.6%: this is the drop in car importations
during the first six months of 2009 compared to the same period in
2008, according to the Federal Customs Service. For trucks, the drop was
86.7%. All national imports recorded a fall of 43% for the same period.
105,000 units: the number of cars and light commercial
vehicles sold in November 2009, down 46% from November 2008. Sales
in October 2009 were 116,700 units according to the AEB.
48% of motor cars are over 10 years old and 18% are over 25 years
old according to Rosstat, the federal statistics agency. 76% of trucks
are over10 years old and 55% of these are over 20 years old according to
the Avtostat agency. The total fleet was estimated to be 41.2 million
vehicles of which 32 million are motor cars on January 1st 2009.
AGENDA
- The Russian Automotive
Industry: March 16th to 18th 2010 at Moscow
An international conference organised by the Adam Smith Institute.
Interventions are planned from the main players from the local and
international industry. You can meat the cream of the leaders in Russian
automobile industry and their purchasing directors.
www.adamsmithconferences.com
- MIMS and Automechanika:
August 25th to 29th 2010 at Moscow
Moscow International Motor Show is now the meeting place for car
manufacturers and suppliers from all around the world.
Automechanika show which used to occur in March will be
incorporated into MIMS-Interauto on the same Crocus Expo site.
mims.ru
To receive the next issues of the France-Russia Automotive/Auto Franco-Russe, fill the subscription form : www.autofrancorusse.fr
La maquette de l'Auto Franco-Russe a été réalisée avec le concours de l'agence Vingt-Quatre Graphisme