Harman Bets on Russia

Hit hard by the economic downturn in 2009, the Russia automotive industry is on a rebound, making analysts predict a bright future for what could potentially be one of the major markets on the planet. Most automakers have seen Russia's potential and have already set up shop or partnerships there, and it’s time for suppliers to raise their expectations and forecasts when it comes to the Russian side of the business.

Harman, one of the major suppliers in the industry and one of the world's biggest audio system producers is betting heavily on the Russian economy. The sustained growth of the local economy is expected to make Harman's Russian division account for $250 million a year by 2016. A small amount, compared to the $3.4 billion sales generated worldwide by Harman last year, but a much greater amount than today.

"The Russian automotive industry is growing very fast and vending premium audio system in the car is also a very big automarket business," Harman CEO Dinesh Paliwal was quoted as saying by Reuters. "It's a big market. Our partners want us to open here offices, engineering support centres and possibly in future some facilities of parts production.”

In the markets where Harman is an established supplier, the company has long given up expecting growth bigger than “low single digits.” This is why the company is turning its attention for markets like Russia and India, where there is enough room for a sustained growth. Or, as the CEO says, a growth of “15-20 percent every year, minimum.”