Russian Car industry
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Future of Russian Car industry
Russia has potential to become a major automotive base for the export of vehicles and components to the rest of the world. The future of Russian Car industry is attractive as the industry is having following strengths. * Russia has amole supplies of many of the world's most value natural resources, especially those required to support a modern industrial economy. * Well educated labor force with sound technical expertise
* The companies can produce part at low cost.
* The domestic manufacturer has large developed network.
The foreign as well as domestic manufacturer has to suffer because of the following weaknesses of industry. * Foreign companies with Joint Venture (JV) in Russia see several obstacle in investing automotive sector of Russia. They are facing the following obstacle. Ø Contradictory Legislation
Ø Lack of low enforcement
Ø Widespread corruption
Ø An unpredictable political environment
Ø Barter Transaction in the OEM ( Original Equipment Manufacturer) market. * Russian Federal Legislation does not provide any specific Tax or Import duty relief to foreign investors manufacturing automotive components * Local ( Domestic) Firm Suffers from
Ø Ineffective management
Ø Outdated technologies and equipment
Ø Lack of financing to mordanize.
Russia in the global auto sector
Growth in car market units, 2009 (per cent)
Car sales volume, 2009 (millions)
Average age of cars nationally (years)
When life gets better, people start buying automobiles. Russia is no exception to the general rule that in emerging markets, every one per cent increase in Gross Domestic...
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