Growth in passenger car market – VDA plans joint stand in Moscow in 2012
"Russia’s policy on industry and trade, oriented on the WTO regulations, increases both legal and investment security for foreign companies. The German automotive industry welcomes Russia’s moves towards joining the World Trade Organization (WTO). Russian membership would be a clear signal for further integration into the world’s economy and would enhance economic co-operation,” stressed Klaus Bräunig, Managing Director of the German Association of the Automotive Industry (VDA). He was speaking at a congress on Russia held in Stuttgart, which the VDA organised jointly with the Russian-German Chamber of Foreign Trade, the Committee on Eastern European Economic Relations, and the Chamber of Industry and Commerce of the Stuttgart region.
Bräunig pointed out that in the first nine months of the current year the Russian light vehicle market grew 45 per cent to 1.92 million units. "The German passenger car manufacturers are moving even faster and increased their market share to 333,000 new cars, or 17.3 per cent,” he continued. In the same period last year their market share came to 15.8 per cent. Exports of passenger cars to Russia rose by about three quarters, to nearly 100,000 vehicles, but they are still nowhere near pre-crisis levels. Local assembly in Russia showed a strong rise of 93 per cent.
"The German automotive industry has contributed considerably to modernisation in Russia. In addition to increasing market shares for German OEMs, the suppliers have also markedly expanded their activities in Russia,” Bräunig emphasised. For example, this year so far Germany has supplied engines and motor vehicle parts worth around 2 billion euro to Russia. This almost equals the volume achieved over 2010 as a whole. However, deliveries to Russia had slumped by more than half in the crisis year of 2009. Exports of commercial vehicles to Russia have also increased strongly again, he added.
Bräunig drew attention to the potential of the Russian automotive market. Passenger car density in Russia was 242 per 1,000 inhabitants, i.e. still about half of that in Germany (520 per 1,000 inhabitants). Added to this was the considerable need for vehicles to be replaced.
Alongside the German vehicle makers, there are also German suppliers in Russia with their own assembly plants, and the number is increasing. Bräunig said that overall the event had shown that the supply base in Russia still offered considerable potential. Russian demands for local value-added were indeed already partly fulfilled, but one task now was also to ensure that local suppliers met international quality standards. Bräunig went on to say that as an automotive location Russia offered handsome opportunities in particular to suppliers in the value-added chain (tier 2) and producers of investment goods. Russia’s automotive policy, he said, was aiming for closer co-operation especially with the international companies. The congress in Stuttgart also covered the challenges of the Russian market that needed to be considered when entering the market, such as the relatively high costs, the availability and qualifications of the workforce, and cultural differences.
The fourth Moscow International Automobile Salon (MIAS) will run from 29 August to 9 September 2012. "The VDA has applied for a joint pavilion for member companies in the supply industry, which will be in the suppliers’ section of the exhibition associated with the Motor Show. We have chosen to have the German pavilion for suppliers at the ‘InterAuto’ because it means we will be right close to the manufacturers,” Bräunig said.
Sourced from vda.de
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