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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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Saturday, Nov. 1

The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at today’s Grand Prix Fitness House PRO, the nation’s premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.

Sunday, Nov. 2

Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.

Monday, Nov. 3

Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the city’s elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.

Tuesday, Nov. 4

Attend the premiere of Canadian director Xavier Dolan’s latest film “Mommy” at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.

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