Russian Government to Discuss Strategy for the Auto Industry

The Russian car market has been seriously affected by the recession. What was once one of the fastest growing car markets in the world dropped fast. Russia’s automotive market has contracted by almost 50 percent in 2009, only managing to total 1.36 million units, as the Jato Dynamics market analysis company informs us. The decrease was registered by all segments and felt by all the automakers in the country, except for Kia.

As car sales have the tendency to affect all the economy, the situation needs to be fixed. The Russian government decided to discuss a development strategy for the auto industry until 2020, said a source in the Cabinet of Ministers on Wednesday.

“We have emphasized four main segments – cars, light commercial vehicles, trucks and busses,” he said. “A forecast has been made for each segment and a scenario for the industry’s development has been formulated.”

The strategy, said the source, implied preservation of the existing level of export taxes and tariffs for the medium term.

“We estimate the medium term approximately till 2015,” he said. The share of the automobile industry in Russia’s gross domestic product is to reach 2.4 percent by 2020.

The Russians hope that by 2020 the car market will hit 3.5 - 3.6 million units each year, out of which 20% will be imported. They also estimated that 8% of the production will go to export. The capacity of the light commercial vehicles market by 2020 is estimated at 350,000, including 30 percent to be imported.