Emerging Trends and Future Prospects in Russian Automotive Industry

Russian Automotive industry is composed of four types of manufacturers – Domestic players, Foreign OEM’s, Joint Ventures and Russian players assembling foreign brands. Trade is important for the automotive industry as imports forms a major part of domestic sales. Government of Russia has implemented decrees specifically for automotive industry to attract foreign OEM manufacturers which includes tax and customs duties reforms and concessions. Russia’s WTO accession is expected to impact on the present regulatory environment. Russian players are expected to face a stiff competition from US, European and Japanese auto makers as the Russian Auto industry would open up for trade and investments. WTO accession is expected to favor the foreign players as Russia would retain rights to grant subsidies, incentives will be provided for foreign investments in the country. Russia is concluding number of trade agreements including countries like India and China, the country may also be used as an export base, especially by Chinese manufacturers. Due Russian Government’s policy support for the OEM manufacturers and opening up of the economy for the foreign investments in automotive market it is anticipated that Central and East European countries will also have an effect on Russia’s prospects as an export base.

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