South Korean auto-major Hyundai recently started a new plant at Kamenka Industrial Zone, St. Petersburg, Russia in June 2008. Ambitions for the market are quite high, reason for it is quite obv
ious, Russian car market is booming and Hyundai sees high demand for budget cars in near future. Hyundai is among many large players having big plans for the country.
ious, Russian car market is booming and Hyundai sees high demand for budget cars in near future. Hyundai is among many large players having big plans for the country.Country where selling a car was illegal (all car companies were under state ownership) just twenty years back, today its seen as the hottest destination.
According to PricewaterhouseCoopers forecast, Russian automotive car market is growing at a terrific pace, set to become number one car market in Europe (even surpassing Germany) with the estimated sales of $96 billion by 2011.
Today, more than 1,50,000 cars are sold in a year and statistics of trade are changing with every passing day.
Opportunities available are beyond estimates (in U.S. there are 800 vehicles per 1000 people, in Russia its just 190); population is largely comprised of first time buyers.
In past five years, sales have almost tripled and it’s still growing. Growth is fuelled by soaring fuel prices along with other factors (large financing options and rising income).
Rising crude oil prices has geared Russian economy move upward (GDP quadrupled in less than 10 years) and turned it into a hottest emerging market.
Most of the auto manufacturers have already marked their presence in the market either by establishing a plant or following other route of ventures and alliances and the competition is intense still demand exceeds supply.
Opportunities available are beyond estimates (in U.S. there are 800 vehicles per 1000 people, in Russia its just 190); population is largely comprised of first time buyers.
In past five years, sales have almost tripled and it’s still growing. Growth is fuelled by soaring fuel prices along with other factors (large financing options and rising income).
Rising crude oil prices has geared Russian economy move upward (GDP quadrupled in less than 10 years) and turned it into a hottest emerging market.
Most of the auto manufacturers have already marked their presence in the market either by establishing a plant or following other route of ventures and alliances and the competition is intense still demand exceeds supply.
Auto manufacturers are experimenting innovative ways to get hold Russian market.
GM holds JV with a Russian carmaker (GM also has two manufacturing facilities at Russia and sells its car under several brand names like Cadillac, Chevrolet, Opel, Hummer and Saab).
Ford has announced to increase the production to capture the major share.
Toyota, Nissan and Volkswagen have made an announcement to design a low cost car for Russia.
Tata Motors has started assembling range of commercial vehicles with its Russian counterpart AMUR.
French manufacturer PSA Peugeot – Citroen and Mitsubishi Motors (Japan) launched a joint company to produce vehicles in Russia.
Renault (with its budget model Logan) have already entered into strategic alliance with Russia’s auto major AvtoVAZ (producer of Lada cars).
Russia provides an advantage of location, cheap but highly qualified labour and large ma
rket to these manufacturers thus Russian automotive market is observing a shift from just-assembling to full-fledged manufacturing. Russian authorities are providing every possible platform to these auto-giants to establish the industry, to promote their intentions, government initially made supplies of parts and components (used in car assembly), custom free and still supporting these car makers in negotiations and establishments. Russian auto market is sixth in the world and third largest in Europe. It grew by 60% in 2007 and estimated to cross 5 million mark (in unit terms) by 2012.
rket to these manufacturers thus Russian automotive market is observing a shift from just-assembling to full-fledged manufacturing. Russian authorities are providing every possible platform to these auto-giants to establish the industry, to promote their intentions, government initially made supplies of parts and components (used in car assembly), custom free and still supporting these car makers in negotiations and establishments. Russian auto market is sixth in the world and third largest in Europe. It grew by 60% in 2007 and estimated to cross 5 million mark (in unit terms) by 2012. 
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