BMW Russia president Christian Kremer said that the company plans to begin building the X5 and X6 in Avtotor in April. The move is also a financial strategy. With sales of BMW SUV set to start in Russia in July, relocating assembly to the country could bring prices down by as much as 10 percent.
"The competition in the premium segment is tight, and localizing will give us a competitive advantage," Kremer was quoted as saying by just-auto.com.
Until now, the SUVs sold by BMW in Russia were imported from the United States and due to the fact that the Russian rubble kept on deteriorating, together with the increase of import taxes, the company raised prices for the X5 and X6 by as much as 11 percent.
"Because of the increased customs tariffs, high loan interest rates and the ruble devaluation, we can expect a further price increase and decline of the automotive market in Russia in the coming months," Martin Jahn, vice chairman of the AEB Automobile Manufacturers Committee, said in the last week.
The two production lines BMW will use at Avtotor will be able to sustain a production capacity of 15,000 vehicles per year. As for 2009, the company's target is to produce 6,000 – 7,000 units. The figures include the models BMW is currently assembling at the plant: the 3 Series, the 5 Series and the X3 SUV.
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