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Nissan begins plant construction in St. Petersburg

Japanese carmaker Nissan celebrated laying the first stone of its first-ever production branch in Russia, on Sunday. New factory in St. Petersburg will produce some 50,000 cars a year for the rapidly growing Russian car market, now 80% dominated by foreig

The company also unveiled new versions of the models it will produce at the plant: the Nissan Teana, catering for the most popular car sector in Russia – the budget C-Class coming in around $US 10,000, and the X-Trail off-roader, already one of Nissan’s best selling models in Russia.

“We have very attractive market here. We can make very good cars here, with high performance, labour, quality of employees, and transportation efficiency,” said Fujio Hosaka, Nissan Russia CEO.

Nissan is following in the tracks of the world’s big three – Ford, General Motors and Toyota – setting up car production in Russia. However this is creating serious shortages of domestic car specialists and available spare parts. The government claims it is doing its best to fill the void.

“Twenty three colleges in St. Petersburg have re-profiled themselves as car production schools. The carmakers themselves have started training Russians at their facilities abroad. Between them they should find enough experts among St. Petersburg’s 5 million residents,” believes Valentina Matvienko, Governor St. Petersburg

But Russia remains chronically undersupplied with quality car parts such as tires, engines and seats.

“St. Petersburg was chosen because it is the biggest port city in Russia and is convenient for shipping car parts from Japan. We believe the Trans-Siberian railway could make towns throughout Russia potential industrial hubs, if tariffs on rail transportation were not unrealistically high,” says Ilya Makarov, motoring analyst.

Experts say Russian automotive market has massive potential, and thus despite all these problems, foreign carmakers are flocking to set up production.