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“AutoEvolution 2014”: Challenges, Opportunities and Support Measures

On October 22, 2014, the fifth anniversary international forum on automotive and auto component industry development in Russia opened in Kaluga.​ The Forum has already acquired the reputation of prestigious event where government representatives, cars and parts manufacturers, experts and analysts can discuss various burning issues related to the automotive industry and where they have a chance to exchange efficient technological and management solutions, to establish new contacts and to find ideas on how to develop the business in a turbulent economic environment.

Alexander Morozov, Director of Transport and Special Machinery Building Department (Ministry of Industry and Trade of the Russian Federation), Anatoly Artamonov, Governor of Kaluga region, and top manageres of car manufacturers have participated in the plenary session opening the Forum.

The participants of the session have provided their assessment of the current status of the automotive industry and discussed it already in place and planned measures to support the industry.

It was mentioned that the environment of the market and of the automotive industry is challenging. Alexander Morozov stated: “Despite of the overall economical situation, three automotive companies are become the leaders of declining trend. These are AutoVAZ, GM and Ford. The explanation of the drop consists in lower demand, market share decrease, unsuccessful launch of new models, low degree of localization”. On the other hand, some brands managed to increase their sales reflecting some positive market trends.

The State put some measures to support the industry. In particular, there are funding for the factories technical upgrade and funding for support transportation of cars from Far East, financing of R&D. Coming back to the fleet renovation program Alexander Morozov has described further measures planned to launch at the beginning of 2015. He mentioned commercial fleet age limits, replacement of ecological tax  for the transport tax, local goods priority in purchases made by the State controlled entities, development of the parts manufacturing strategy, development of the collars manufacturing strategy. “In November we’ll proceed to wider public discussions. These measures will be developed by the State for the first time.”- said Alexander Morozov.

Anatoly Artamonov in his turn presented the automotive industry development dynamics in the region. In the Kaluga automotive manufacturing cluster there are three OEM manufacturers and 27 parts manufacturers. “In order to increase the degree of localization it is vital to support the automotive small and middle size businesses strategically. Special attention should be paid to the export oriented companies.” - remarked Anatoly Artamonov.

World automotive representatives shared their plans on the Russian market as a whole and on the Kaluga region.

Coming back to the turbulent economical environment Jean-Christophe Marchal, CEO of PSMA Rus, highlighted that his company was adapting its activities in a complex way. “We have designed the factory development strategy in Kaluga. It’s the top priority for the Group. Our development plans on the Russian market are directly linked to the success of the Kaluga plant. I’m sure the constructive dialogue already established with Kaluga region will keep running smoothly. We are ready to increase the local components in our manufacturing by 10% by the end of 2015; we are interested in closer integration with Russian manufacturers. We are also planning to localize our top management and to decrease the number of expat employees. In this regard we invest heavily in human resources. We develop our staff in specialized training centers etc. We intend to cooperate with Russian small and middle size business that will finally result in localizing 1, 2 and 3 layer suppliers. Also focusing on CIS markets we’ll be able to export more and thus to produce more.”  



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