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1 Sep, 2010 07:55

Russian auto industry under threat by foreign carmakers

Foreign carmakers at the Moscow International Motor Show have tipped Russia to drive their sales out of the economic downturn. However, observers warn success will come at the expense of domestic brands.

Car giant Gaz showed off the models it hopes will kick start sales this year, though they are presenting no cars – only vans – for the first time ever.

However, Autostat called its main car, the Siber, “unfortunate”, with January-June sales scraping just one thousand.

Amid reports Siber’s production line will be turned over to Mercedes, GM or Tata cars, Bo Anderson, President at GAZ, saying he is now banking on these Gazelles.

“My first focus is to make sure the Gazelles are successful. Between now and the end of the year, total Gazelle sales will be around 75,000.”

Russia’s largest automaker Avtovaz is gearing up to make cars for Renault and Nissan. Top analyst Elena Sakhnova told RT this marks the beginning of the end for the clunky Lada brand, leading to its giant Togliatti plant making only foreign models. François Goupil de Bouille, Nissan’s Russian CEO, says his company is betting on a spurt in its own sales in Russia.

“We will sell on our fiscal year to March 100,000 cars, which is more or less twice as much as we had before, thus increasing the market share. It's a lot of satisfaction for us.”

For the first time last month, foreign cars in Russia outsold the domestic market. Even though Russia will overtake Germany as Europe’s largest car market as early as next year, the lion’s share of that is still destined for foreign cars.

Without radical redesign, analysts think the domestic carmakers could be facing extinction.