AUTOMOBILE INDUSTRY OF RUSSIA

Plan History and Post-Soviet adjustment 2000 to 2008 Global financial crisis Recent development Domestic brands New projects Key companies Heavy vehicles Economic and political significance

History

The Soviet Union possessed a large automotive industry. In late 1987, the industry produced 2 million cars, satisfying 45% of the domestic demand. However, the quality of production was not very high, and after the dissolution of the Soviet Union the industry faced a crisis due to competitive foreign imports. Japanese brands overtook the lower-end Ladas. By 1993, total output was down 14% compared to 1990 levels.Soviet Uniondissolution of the Soviet UnionLadas

From 2000 to 2008

By 2005 the Russian car market was booming. In 2005, 1,446,525 new cars were sold, including 832,200 Russian models and 614,325 foreign ones. Foreign companies started to massively invest in production in Russia: the number of foreign cars produced in Russia surged from 157,179 in 2005 to 456,500 in The value of the Russian market grew at a brisk pace: 14% in 2005, 36% in 2006 and 67% in 2007—making it the world's fastest growing automotive market by Some regions provide extensive support for large investors (over $100 million.) These include Saint Petersburg/Leningrad Oblast (Toyota, GM, Nissan) and Kaluga Oblast (VW). Kaluga has been especially successful in attracting foreign companies, as has been Kaliningrad Oblast.Saint PetersburgLeningrad OblastKaluga OblastKaliningrad Oblast

Global financial crisis President Vladimir Putin meeting withAvtoVAZ employees in the company's factory in TolyattiVladimir PutinAvtoVAZTolyatti

Production of passenger cars dropped from 1,470,000 units in 2008 to just 597,000 units in Lorry production fell from 256,000 to 91,000 in the same period. In late 2008, the Russian government introduced protectionist measures, worth $5 billion, to improve the situation in the industry. This included $2 billion of bailouts for troubled companies and $3 billion of credits for buyers of Russian cars. Prime minister Vladimir Putin described the move as vital in order to save jobs. The tariffs for imported foreign cars and trucks were increased to a minimum of 50% and go up to 100%.bailoutsVladimir Putin

Recent development Volga SiberVolga Siber, licensed copy of Chrysler Sebring introduced in 2007 and manufactured by GAZ until 2010.Chrysler SebringGAZ

By the end of 2010, automotive production had returned to pre-crisis levels. Nine out of the ten most sold models in Russia in 2010 were domestically produced, with Avtovaz's Lada models topping the list. In the first 7 months of 2010, sales of Lada cars increased by 60%. In 2010, Russia was the world's 15th largest producer of cars. The Russian automotive industry currently (as of 2010) accounts for about 7% of worldwide car production

Domestic brands The Lada Priora, made by AvtoVAZ, was the most sold car in Russia in 2009Lada PrioraAvtoVAZ

The four most popular cars in Russia in 2009 were all AvtoVAZ models. The economy car Lada Priora topped the list with 84,779 sold units. Lada Samara was second with 77,679 units sold in Russia, and the classic Lada 2105/2107 was third with sales of 57,499. The higher-end Lada Kalina was the fourth most sold car in Russia in 2009, selling 52,499 units that year.

New projects MarussiaMarussia is Russia's first modern sports car.

In recent years, Russian automotive industry companies have launched several new projects, some of which are highly ambitious. Marussia brand, produced by Marussia Motors, became the first modern sports car and the first supercar produced in Russia. The Marussia B1 was launched on 16 December 2008 in the New Manezh Hall in Moscow. On 10 September 2010 the first Marussia Motors show room opened in Moscow. Marussia Motors is led by Nikolay Fomenko, a notable Russian showman, singer, actor and racer.

Key companies The GAZelle van, produced by GAZ, is popular on the light commercial vehicle marketGAZelleGAZ

The largest company of Russia's automotive industry is Avtovaz, located in the city of Tolyatti. It currently employs more than 130,000 people, and its Lada models dominate the Russian car market. Avtovaz models account for about 50% of Russia's total car production. Russia's second largest car manufacturer is Avtotor, located in Kaliningrad Oblast. In 2009, Avtotor produced 60,000 cars and accounted for 10% of Russian car production. Avtoframos, the third largest car manufacturer, produced 49,500 cars in Avtoframos is a joint venture between France's Renault and the Moscow city administration, but is majority owned by Renault. The figure is expected to rise to 74% by The fourth and fifth largest carmakers in Russia are Volkswagen and Ford, respectively. In total, the five largest companies of the industry account for 80% of all cars made in Russia. In the light commercial vehicle sector, the GAZelle van, manufactured by GAZ has been very popular, occupying a market share of 49% in 2009 and selling 42,400 units. The Avtoperevozchik magazine declared GAZelle as the most successful vehicle of 2009 in the Russian automotive market.

Heavy industry KaMAZ military truck mounted withPantsir-S1 air defense system. KaMAZ is the largest truck maker in Russia

In the heavy vehicle sector, the largest company is the truck maker KaMAZ. It is also one of the largest companies in the whole Russian automotive industry. In 2010, KaMAZ sold a total of 32,293 trucks, 28,254 in Russia and 4,039 in foreign countries. Russia's largest tractor maker, and one of the largest machine building companies in the world, is Concern Tractor Plants, located in Cheboksary. The company employs around 45,000 people.

The economic and political significance The main administration building ofAvtovaz in TogliattiAvtovazTogliatti

Russia's automotive industry is a significant economic sector. It directly employs 600,000 people and supports around 2–3 million people in related industries. It is politically a very important part of the country's economy. Former Prime Minister and current President Vladimir Putin has taken a personal interest in the automotive industry. In a symbolic gesture of support, Putin made a highly publicized road trip on the new Amur Highway in August 2010, driving 2,165 kilometers in a Lada Kalina Sport. Putin described the car as "excellent, even beyond my expectations", and praised it as "comfortable" and "almost noise-free.” The event was intended to show support for AvtoVAZ, which was recovering from the serious economic crisis