Press Releases

Lindemann: Russia remains growth market for automobiles

Berlin, 15 May 2013

Russia continues to become more important for the German automotive industry. “One fifth of all passenger cars newly registered in Russia bear a German group badge. In Russia, too, we are pursuing a successful two-pillar strategy – based on exports from German plants and simultaneous establishment and expansion of local assembly,” said Dr Kay Lindemann, Managing Director of the German Association of the Automotive Industry (VDA), at the Germany-Russia entrepreneurs’ congress in Berlin. Local production and exports to Russia both increased last year. Lindemann continued, “In 2012 the German manufacturers exported almost 157,000 passenger cars to Russia, which was another year-on-year increase. Yet passenger car production by German OEMs in Russia rose even more strongly, in fact by one third, to 180,000 vehicles.” Their market share grew by nearly three percentage points in 2012 to reach 20.9 per cent. Despite economic development in Russia easing off slightly at the beginning of the year, Lindemann stressed, “Russia remains a growth market for automobiles. The German manufacturers and suppliers want to utilise the opportunities on this market jointly with their Russian cooperation partners.”

Russia was also becoming a more significant exporter, Lindemann added. For example, in 2012 the value of motor vehicles, parts and accessories produced in Russia and exported to Germany exceeded 51 million euro. That represents a five-fold increase compared with the year 2000. Lindemann said, “However different the starting positions are – the automotive trade between Germany and Russia is not a one-way street. For Russia the trends points upwards.”

Russia’s accession to the WTO in August 2012 clearly signalled the country’s further integration into the global economy. Lindemann said, adding, “The European automotive industry is working on the expectation that Russia will embrace the rules of international trade and align its industrial and trade policy accordingly.” One major aspect of WTO membership was the equal treatment of domestic and foreign companies. At present, however, the vehicle recycling fee introduced shortly after Russia joined the WTO represents unequal treatment putting the importers at a disadvantage. Lindemann emphasised: “At this point we expect the situation to be corrected. Russia should use vehicle recycling as an opportunity and set up a market-oriented recycling scheme. A re-use and recovery guarantee involving manufacturers and importers has proven its worth in the EU. The producers would take back end-of-life vehicles free of charge and guarantee ecologically sound handling. This would make a recycling fee imposed on new vehicles by the state superfluous. At the very least, a choice should be available between an appropriate fee and a recycling guarantee. Russia would then be sending out a positive signal to its partners.” He added that establishing a market-economy-based recycling system would also offer considerable business potential to small and medium-sized Russian companies.

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