Big Automobile Business Likes Russia!

Ford Will Build a Second Plant in Russia
Ford Motors plans to build a second auto plant in Russia, according to Reuters, citing Ford European vice president Jim Tetreault.
Tetreault said the site for the new plant will be chosen next year. He also said the capacity of the Ford plant in Vsevolozhsk, Leningrad Region, will be brought up to 125,000 vehicles to meet the demand for Ford cars in Russia. That plant current produces 75,000 cars per year, and almost half of the Fords sold in Russia are imported. Tetreault did not specify what models would be made at the new plant. Experts suggest that the Fiesta family car and Kuga crossover SUV may be chosen.

Why are they building another plant in Russia?

The Russian market kept Ford from going belly up!
Ford made money in Russia last year and the years before. Ford sells all cars it made in its Russian Plant to Russians and can sell more. It even imports cars from outside of Russia to keep up with the demand. Ford lost money in the USA.

Looks like the rumor could be true, Ford is slowly moving overseas!

GM to Launch Carmaker in St. Petersburg Nov. 5 2008
General Motors will launch a plant in St. Petersburg on November 5, 2008, St. Petersburg Governor Valentina Matvienko announced when delivering the annual address to the Legislative Assembly of the city, RIA Novosti reported.
“The second automobile plant, General Motors, will be launched November 5,” the governor said, reminding that laying the foundation stone of Hyundai has been slated for June, when St. Petersburg hosts the Economic Forum.

One of the global carmakers, General Motors, will launch in St. Petersburg the plant worth roughly $300 million with the annual capacity of 70,000 cars. Captiva off-highway vehicles are amid the models to be made by GM in that city of Russia.

General Motors is represented in Russia already. The company has a joint venture with local automobile giant AvtoVAZ. GM-AvtoVAZ was set into motion September 2002 and it currently makes Chevrolet Niva off-highway vehicles and Chevrolet Viva cars.

Goodyear Building Plant in Yaroslavl?
For the first time in three years, a foreign tire-maker may build a plant in Russia. The U.S. company Goodyear is considering a $200-250-million project in Yaroslavl Region to produce up to 5 million car tires a year. Goodyear executives met with regional governor Sergey Bakhrukov at the end of last month and asked him to allot them a plot of land. Sources say that Bakhrukov set aside about 70 ha. for the company. That land has no infrastructure, however. In addition, according to sources, Bakhrukov has asked Russian President Dmitry Medvedev to provide Goodyear with investment benefits, and the president has already asked the Ministry of Industry and Trade to look into the question. Ernest & Young consulted Goodyear on the project.
Goodyear, the Yaroslavl administration and the Ministry of Industry and Trade were unavailable for comment Friday evening, but Igor Karavaev, deputy general director of OAO SIBUR – Russian Tires, which controls the Yaroslavl Tire Plant that “the project really is being discussed” and “SIBUR is one of the participants in that discussion.”

The Goodyear Tire & Rubber Co. owns 60 plants in 26 countries. It sells the most tires in the United States and second most in Europe. The company is made up of six divisions: British Dunlop Tyres, American Kelly-Springfield Tire Company и Lee Tire and Rubber Co., Slovenian Sava Tires, German Fulda and Polish Debica. It produces the Assurance, Fortera, Wrangler, Eagle, Nordic and Ultra Grip brands. There are two Western tire plants already operating in Russia. They are the French Michelin, built outside Moscow in 2004, which makes 2 million tires per year, and the Finnish Nokian Tires plant in Leningrad Region, which produces 4 million tires per year and may potentially increase its capacity to 10 million. The Japanese Bridgestone Co. considered building a plant in St. Petersburg, but rejected the idea.

Yaroslavl Region is relatively close to carmakers in both Leningrad and Moscow Regions. Goodyear already has experience there, since Yaroslavl Tire Plant has produced Goodyear tires on the off-take system (in which Goodyear sells them itself and the plant receives only a production commission). SIBUR – Russia Tires is likely to oppose the American company’s plans. “The state should support domestic producers first of all and create condition s for the innovative development of Russian enterprises,” Karavaev asserted. He noted that the People’s Republic of China requires foreign tire makers to form joint enterprises with local tire-makers. The rapidly expanding car assembly plants in Russia will have to be localized by at least 30 percent in the future. Therefore, if Goodyear is unable to finalize the project in Yaroslavl, it will be highly motivated to continue it in another region of Russia. Goodyear executives say unofficially that other regions are under consideration.

Renault to Make New Model in Russia!
Renault plans to assemble its new Sandro model, a five-door hatchback based on its budget model Logan, at its Avtoframos plant in Moscow. The Logan is also assembled at the Avtoframos plant. Assembly of the Sandro, with both gasoline and diesel engines, will begin in late 2009. The company has not said how many of the new car it plans to produce. Sources say that it may make 80,000-100,000 vehicles per year, which would use half of Avtoframos’ capacity. One source says, however, that the plant’s capacity will be increased next year to 190,000 vehicles. Officially, Renault plans to increase the plant’s capacity from the current 80,000 vehicles to 160,000.
Renault has been talking about expanding the capacity of Avtoframos and creating another model based on the Logan since 2005. The expansion at Avtoframos is estimated to cost $150 million. They note at the Ministry of Economic Development and Ministry of Industry and Trade that Avtoframos has yet to make amendments to its investment agreement for the industrial assembly of automobiles.

Observers say that the Sandro is likely to cost between $13,000 and $15,000, that is, more than the Logan. It would thus compete with AvtoVAZ models such as the Lada Priora (starting price $13,000), Kalina ($12,000) and Lada 110 models ($11,000). That price segment is one of the most popular in Russia. Renault owns a blocking (25-percent) package in by AvtoVAZ. A seven-passenger station wagon based on the Logan is made by AvtoVAZ.

French-Japanese Alliance to Build a Carmaker in Russia!
Another two car giants chose Russia for car assembly. French PSA Peugeot Citroen and Japan’s Mitsubishi Motors Co. have clinched a deal to set up a respective venture.
An automobile plant, which foundation stone will be laid in Kaluga June 10, will be making Mitsubishi, Peugeot and Citroen mid-size off-highway vehicles and mid-size cars of Peugeot and Citroen brands. The capacity is estimated at roughly 160,000 cars a year.

The initial plans were that Peugeot Citroen would independently construct the plant. But Mitsubishi is needed for a few models, which it makes for the French consortium. The matter at stake is all-wheel drive C-Crosser and Peugeot 4007.

Mitsubishi announced January 24, 2008 that it concluded an agreement on industrial assembly of cars in Russia with the RF Economic Development Ministry.

Quite a few of automobile giants have recently decided to launch car assembly in Russia. The Leningrad and Kaluga regions are the most favored whereabouts for that undertaking. Of interest is that Volkswagen has chosen both regions for Russia’s expansion.

Toyota Motor Corp. inaugurated its facility in St. Petersburg past fall. Suzuki and Nissan are also amid the companies that have decided to have plants there.

They all have one thing in mind…….


Windows to Russia!