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International Carmakers Confident of Market Revival

Published: August 29, 2014 (Issue # 1826)

  • The Ford Focus sedan was the bestseller in its segment in Russia between January and August 2013, but has not sold even half that number during the same period this year.
    Photo: Vladimir Filonov / SPT

International carmakers are hopeful that Russia can become Europe's biggest market and vindicate their decision to spend more on localizing production in the country, company executives said on the sidelines of the Moscow International Automobile Salon on Thursday.

If that is to happen, Russia's car market will need to stage a dramatic recovery. Sales in Russia have dropped by almost 10 percent in the first seven months of 2014 compared with the same period last year, according to the Association of European Businesses, a decline widely attributed to Russia's economic slowdown combined with geopolitical tensions over Ukraine.

The forecasts for the next four months are not positive. "By the end of the year we expect Russia's car market to decline by about 12 percent. But considering the negative impact the geopolitical tension has on trade, the decline could be even heavier," said Kay Lindemann, managing director of the German Association of the Automotive Industry.

But any car manufacturers looking for reasons to be optimistic need only look back a couple of years. The Russian automobile market quickly regenerated after the financial crisis of 2008-09, and by the end of 2012 annual car sales were close to 3 million units, double 2009 levels.

Prior to the current crisis, German carmakers were enjoying overall market growth in Russia, with the share of locally produced and imported German brands rising to 20 percent in 2012.

At the same time, German car producers were ramping up local production not only of car chassis, but of components as well, Lindemann said, adding that exports by Russian auto-part producers to Germany have gone from 27 percent last year to 41 percent this year.

The 3 Big Issues

Ford Sollers, a joint venture that handles production of the U.S. company's vehicles in Russia, has been one of the hardest-hit this year, with sales falling 52 percent in July.

The company has had to cut costs and production, and keep its prices at relatively low levels.

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Friday, Sept. 19

SPIBA’s newest addition to their Cultural Discoveries events is “Handmade in Germany,” an exhibition featuring unique handmade objects of a significantly higher quality than mass-produced items. The work of over 100 German manufacturers will be displayed during the event, which opens today in the Lutheran Church of Saint Peter and Paul on Nevsky Prospekt and runs through Sept. 28.

Saturday, Sept. 20

Starting on Sept. 18 and ending tomorrow is the Extreme Fantasy Wakeboarding Festival in Sunpark by Sredny Suzdalskoye lake in the Ozerki region of the city.

Those after something more laid back can instead head to Jazz and Wine night at TerraVino with legendary jazz guitarist Ildar Kazahanov. 12/14 Admiralteyskaya Emb.

Sunday, Sept. 21

Learn more about African culture and get some exercise during today’s “Djembe and Vuvuzela,” a bike ride starting in Palace Square that includes several stops where riders can listen to the music of Africa or watch short films about the continent. The riders plan to set off at 4 p.m. and all you need to join is a set of wheels.

Monday, Sept. 22

Do you love puppetry? If so, then be sure to go to BTK-Fest, a five-day festival that starts on Sept. 19 celebrating the art. Contemporaries from France, Belgium, the U.K. and other countries will join Russian artists to put on theatrical performances involving a variety of themes, materials and eras. Workshops and meetings are also scheduled for a chance to discuss the artistic medium in further depth.

Tuesday, Sept. 23

Marina Suhih, Director of the External Communications Department at Rostelecom North-West, and Yana Donskaya, HR Director for Northern Capital Gateway are just some of the confirmed participants of today’s round table discussion on “Interaction with Trade Unions” being hosted by SPIBA. Confirm your attendance with SPIBA by Sept. 22.

Kino Expo 2014, an international film industry convention, will be at LenExpo from today until Sept. 26. The third largest exhibition of film equipment in the world, the expo focuses on not only Russia but former Soviet republics as well.

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