Automotive industry in Russia
Encyclopedia
Automotive production is a significant industry in Russia
, directly employing around 600,000 people or 1% of the country's total work force. Russia was the world's 15th largest car producer in 2010, and accounts for about 7% of the worldwide production. In 2009 the industry produced 595,807 light vehicles, down from 1,469,898 in 2008 due to the global financial crisis. The largest companies are light vehicle producers AvtoVAZ
and GAZ
, while KAMAZ
is the leading heavy vehicle producer. Eleven foreign carmakers have production operations or are constructing plants in Russia.
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 Lada
s; on the high-end sector, Volga
sales dropped in favor of German-built Mercedes
and BMW
s. By 1993, total output was down 14% compared to 1990 levels. However, other industry sectors suffered much worse. Despite the problems, Russian brands retained a significant market share. In the 1990s, attempts to establish joint ventures with foreign companies stalled due to lack of funding.
's presidency, the Russian economy recovered. Macroeconomic trends were strong and growing incomes of the population led to a surging demand, and 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 2007. 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 2008.
To boost the market share of locally produced vehicles, the Russian government implemented several protectionist measures and launched programs to attract foreign producers into the country. In late 2005, the Russian government enacted legislation to create special economic zone
s (SEZ) with the aim of encouraging investments by foreign automotive companies. The benefits of operating in the special economic zones include tax allowances, abolishment of asset and land taxes and protection against changes in the tax regime. Some regions also 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
.
Since the 2000s, foreign companies have been flocking to enter Russia, seeing Russia as a local production location and export powerhouse. Russia's labor, material and energy costs are only 1/6 compared to those in Europe. Russia also has plenty of skilled workers and an excellent education system
.
, which started in the United States. Production of passenger cars dropped from 1,470,000 units in 2008 to just 597,000 units in 2009. 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 50% and 100%, respectively. The tariffs are linked to engine size of the vehicle. The increased duties led to protests in Russian cities, most notably in Vladivostok
, where the import of Japanese car is an important sector of the city's economy. To compensate for the losses of the Vladivostok businesses, Prime Minister Putin ordered the car manufacturing company Sollers to move one of its factories from Moscow to Vladivostok. The move was completed in 2009, and the factory now employs about 700 locals. It was planned to produce 13,200 cars in Vladivostok in 2010.
The most efficient anti-crisis measure executed by the Russian government was the introduction of a car scrappage scheme in March 2010. Under the scheme, buyers of new cars can receive a subsidy of up to 600,000 rubles ($20,000). Sales of Russia's largest carmaker Avtovaz
doubled in the second quarter of 2010 as a result, and the company returned to profit.
By the end of 2010, automotive production had returned to pre-crisis levels, thanks to the government's anti-crisis measures. 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%, the Korean KIA reported a jump of 101% Chevrolet's sales rose by 15%.
In 2010, Russia was the world's 15th largest producer of cars, beating Italy
and Poland
, among others. The Russian automotive industry currently accounts for about 7% of worldwide car production.
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. Lada 2105 was expected to considerably increase sales following the car scrappage scheme launched in March 2010. The higher-end Lada Kalina
was the fourth most sold car in Russia in 2009, selling 52,499 units that year.
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.
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.
In 2010, the company acquired a 'significant stake' in the Virgin Racing
Formula One team, which was renamed Marussia Virgin Racing from 2011. This team is to become the first ever Russian-owned team in Formula One
.
Another ambitious Russian project is Ё-mobile (Yo-mobile), an innovative city car
with a rotor engine that can burn both gasoline and natural gas and is connected to a pair of electric motor
s. The car was introduced on 13 December 2010 in Moscow, a product of a joint venture between Yarovit, a producer of trucks based in St. Petersburg, Russia and the Onexim investment group, headed by Mikhail Prokhorov
, who is the leader and financier of the project. Prokhorov plans to invest around €150 million (US$200 million) in a the venture, intending the vehicle to "break the stereotype saying Russia can't produce good cars."
The Ё-mobile will be sold in three different body types—a sedan or coupe
, a hatchback
and a delivery truck. Most components of the vehicle will be produced in either Russia or former Soviet Union countries. The serial production will start in 2012, with an aim to sell 10,000 during the first year of production. The initial price is to be between $10,000 and $14,500, within reach of Russia's middle class. While it will be initially sold in Russia, ë-Auto plans to sell the vehicle in Europe pending compliance with European Union
regulations.
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
. Avtotor manufactures foreign models, such as BMW
, Kia
, and General Motors
' Cadillac
and Chevrolet
vehicles. 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 2009. Its plant is located in the south-east part of the city of Moscow. Avtoframos is a joint venture between France's Renault
and the Moscow city administration, but is majority owned by Renault. The company manufactures Renault Logan and Renault Sandero models. The ratio of Russian-made parts is 54%. The figure is expected to rise to 74% by 2012.
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 heavy vehicle sector, the largest company is the truckmaker 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.
Another very important company is GAZ
, which makes vans, trucks and busses, among other products. Its most popular product is the GAZelle
van, which has a market share of 49% in the light commercial vehicle market. In 2009, the company launched an improved version, called GAZelle Business. In the bus sector, GAZ occupied a market share of 77%. It sold 6,169 buses in the small-class, 1,806 in the medium class and 1,156 in the large class.
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.
factory in Tolyatti
is massively important to the city. Tolyatti is a typical monotown
, a city whose economy is dependent on a single company. The factory employs around 100,000 people of the city's population of 700,000.
In 2009, President Dmitry Medvedev
launched the Medvedev modernisation programme
, which aims to diversify Russia's raw materials and energy-dominated economy, turning it into a modern high-tech economy based on innovation. Following this, Russia's automotive industry has been in the spotlight due to its great potential for modernisation.
Former President and current Prime Minister 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.
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, directly employing around 600,000 people or 1% of the country's total work force. Russia was the world's 15th largest car producer in 2010, and accounts for about 7% of the worldwide production. In 2009 the industry produced 595,807 light vehicles, down from 1,469,898 in 2008 due to the global financial crisis. The largest companies are light vehicle producers AvtoVAZ
AvtoVAZ
AvtoVAZ is the Russian automobile manufacturer formerly known as VAZ: Volzhsky Avtomobilny Zavod , but better known to the world under the trade name Lada. The company was established in the late 1960s in collaboration with Fiat...
and GAZ
GAZ
GAZ or Gorkovsky Avtomobilny Zavod , translated as Gorky Automobile Plant , started in 1932 as NAZ, a cooperation between Ford and the Soviet Union. It is one of the largest companies in the Russian automotive industry....
, while KAMAZ
Kamaz
KAMAZ is a Russian truck manufacturer located in Naberezhnye Chelny, Tatarstan, Russian Federation. KAMAZ opened their doors in 1976...
is the leading heavy vehicle producer. Eleven foreign carmakers have production operations or are constructing plants in Russia.
Post-Soviet adjustments
The Soviet UnionSoviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
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
Dissolution of the Soviet Union
The dissolution of the Soviet Union was the disintegration of the federal political structures and central government of the Union of Soviet Socialist Republics , resulting in the independence of all fifteen republics of the Soviet Union between March 11, 1990 and December 25, 1991...
the industry faced a crisis due to competitive foreign imports. Japanese brands overtook the lower-end Lada
Lada
Lada is a trademark of AvtoVAZ, a Russian car manufacturer in Tolyatti, Samara Oblast. All AvtoVAZ vehicles are currently sold under the Lada brand, though this was not always so; Lada was originally AvtoVAZ's export brand for models it sold under the Zhiguli name in the domestic Soviet market...
s; on the high-end sector, Volga
Volga (automobile)
Volga is an automobile brand that originated in the Soviet Union to replace the venerated GAZ-M20 Pobeda in 1956. Modern in design, it became a symbol of higher status in the Soviet nomenklatura...
sales dropped in favor of German-built Mercedes
Mercedes (car)
Mercedes was a brand of the Daimler-Motoren-Gesellschaft . DMG which began to develop in 1900, after the death of its co-founder, Gottlieb Daimler...
and BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
s. By 1993, total output was down 14% compared to 1990 levels. However, other industry sectors suffered much worse. Despite the problems, Russian brands retained a significant market share. In the 1990s, attempts to establish joint ventures with foreign companies stalled due to lack of funding.
The Putin years
In the early 2000s, under Vladimir PutinVladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...
's presidency, the Russian economy recovered. Macroeconomic trends were strong and growing incomes of the population led to a surging demand, and 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 2007. 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 2008.
To boost the market share of locally produced vehicles, the Russian government implemented several protectionist measures and launched programs to attract foreign producers into the country. In late 2005, the Russian government enacted legislation to create special economic zone
Special Economic Zone
A Special Economic Zone is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws...
s (SEZ) with the aim of encouraging investments by foreign automotive companies. The benefits of operating in the special economic zones include tax allowances, abolishment of asset and land taxes and protection against changes in the tax regime. Some regions also provide extensive support for large investors (over $100 million.) These include Saint Petersburg
Saint Petersburg
Saint Petersburg is a city and a federal subject of Russia located on the Neva River at the head of the Gulf of Finland on the Baltic Sea...
/Leningrad Oblast
Leningrad Oblast
Leningrad Oblast is a federal subject of Russia . It was established on August 1, 1927, although it was not until 1946 that the oblast's borders had been mostly settled in their present position...
(Toyota, GM, Nissan) and Kaluga Oblast
Kaluga Oblast
Kaluga Oblast is a federal subject of Russia . Its administrative center is the city of Kaluga.-Geography:Kaluga Oblast is located in the central part of the East European Plain. The Smolensk Highland lays in the western and north-western part of the oblast, while the Central Russian Highland -...
(VW). Kaluga has been especially successful in attracting foreign companies, as has been Kaliningrad Oblast
Kaliningrad Oblast
Kaliningrad Oblast is a federal subject of Russia situated on the Baltic coast. It has a population of The oblast forms the westernmost part of the Russian Federation, but it has no land connection to the rest of Russia. Since its creation it has been an exclave of the Russian SFSR and then the...
.
Since the 2000s, foreign companies have been flocking to enter Russia, seeing Russia as a local production location and export powerhouse. Russia's labor, material and energy costs are only 1/6 compared to those in Europe. Russia also has plenty of skilled workers and an excellent education system
Education in Russia
Education in Russia is provided predominantly by the state and is regulated by the federal Ministry of Education and Science. Regional authorities regulate education within their jurisdictions within the prevailing framework of federal laws. In 2004 state spending for education amounted to 3.6% of...
.
Global financial crisis
Russia's automotive industry was hit hard by the late 2000s recessionLate 2000s recession
The late-2000s recession, sometimes referred to as the Great Recession or Lesser Depression or Long Recession, is a severe ongoing global economic problem that began in December 2007 and took a particularly sharp downward turn in September 2008. The Great Recession has affected the entire world...
, which started in the United States. Production of passenger cars dropped from 1,470,000 units in 2008 to just 597,000 units in 2009. 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
Vladimir Putin
Vladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...
described the move as vital in order to save jobs. The tariffs for imported foreign cars and trucks were increased to a minimum 50% and 100%, respectively. The tariffs are linked to engine size of the vehicle. The increased duties led to protests in Russian cities, most notably in Vladivostok
Vladivostok
The city is located in the southern extremity of Muravyov-Amursky Peninsula, which is about 30 km long and approximately 12 km wide.The highest point is Mount Kholodilnik, the height of which is 257 m...
, where the import of Japanese car is an important sector of the city's economy. To compensate for the losses of the Vladivostok businesses, Prime Minister Putin ordered the car manufacturing company Sollers to move one of its factories from Moscow to Vladivostok. The move was completed in 2009, and the factory now employs about 700 locals. It was planned to produce 13,200 cars in Vladivostok in 2010.
The most efficient anti-crisis measure executed by the Russian government was the introduction of a car scrappage scheme in March 2010. Under the scheme, buyers of new cars can receive a subsidy of up to 600,000 rubles ($20,000). Sales of Russia's largest carmaker Avtovaz
AvtoVAZ
AvtoVAZ is the Russian automobile manufacturer formerly known as VAZ: Volzhsky Avtomobilny Zavod , but better known to the world under the trade name Lada. The company was established in the late 1960s in collaboration with Fiat...
doubled in the second quarter of 2010 as a result, and the company returned to profit.
Recent developments
In 2010, Russia was the world's 15th largest producer of cars, beating Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
and Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
, among others. The Russian automotive industry currently accounts for about 7% of worldwide car production.
Structure
The Russian automotive industry can be divided into four types of companies: local brand producers, foreign OEMs, joint ventures and Russian companies producing foreign brands. In 2008, there were 5,445 companies manufacturing vehicles and related equipment in Russia. The volume of production and sales amounted to 1,513 billion rubles.Domestic brands
The four most popular cars in Russia in 2009 were all AvtoVAZ models. The economy car Lada PrioraLada Priora
Lada Priora is an economy car produced by the Russian automaker AvtoVAZ since March, 2007. It is largely a restyled Lada 110.-Body styles:* VAZ-2170: base sedan ;...
topped the list with 84,779 sold units. Lada Samara
Lada Samara
The Lada Samara or VAZ-2108 is an economy car produced by Soviet/Russian vehicle manufacturer AvtoVAZ's Lada brand, from 1984 until 2004. The brand name Samara originally was used only for exported models, in Russia the same model was called "Sputnik" , until 1991, when the sedan version of Samara...
was second with 77,679 units sold in Russia, and the classic Lada 2105/2107
Lada Riva
The VAZ-2105, VAZ-2104 and VAZ-2107 are a series of medium-sized family cars built by Russian car manufacturer AvtoVAZ, introduced in 1980 in the Soviet Union, and progressively in other European markets through the early 1980s and sold in both saloon and estate versions...
was third with sales of 57,499. Lada 2105 was expected to considerably increase sales following the car scrappage scheme launched in March 2010. The higher-end Lada Kalina
Lada Kalina
The Lada Kalina is a supermini produced by the Russian automaker AvtoVAZ and sold under the Lada brand. It began production in November 2004 as the 2004 year model in Russia, Ukraine, Kazakhstan and Belarus, although dealership availability for foreign markets started only in September 2005.The...
was the fourth most sold car in Russia in 2009, selling 52,499 units that year.
In the light commercial vehicle sector, the GAZelle
GAZelle
The GAZelle is a series of mid-sized trucks, vans and buses made by Russian car manufacturer GAZ. GAZelles are similar to the later launched GAZ-2215/GAZ-2752 Sobol and GAZ-3310 Valdai line of vans and light trucks...
van, manufactured by GAZ
GAZ
GAZ or Gorkovsky Avtomobilny Zavod , translated as Gorky Automobile Plant , started in 1932 as NAZ, a cooperation between Ford and the Soviet Union. It is one of the largest companies in the Russian automotive industry....
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.
New projects
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
Sports car
A sports car is a small, usually two seat, two door automobile designed for high speed driving and maneuverability....
and the first supercar
Supercar
Supercar is a term used most often to describe an expensive high end car. It has been defined specifically as "a very expensive, fast or powerful car"...
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.
In 2010, the company acquired a 'significant stake' in the Virgin Racing
Virgin Racing
Marussia Virgin Racing, the trading name of Virgin Racing Limited, is a Russian owned Formula One racing team based in the United Kingdom and racing on a Russian licence, which made its debut in the 2010 Formula One season. It was granted entry as Manor Grand Prix on 12 June 2009, as one of four...
Formula One team, which was renamed Marussia Virgin Racing from 2011. This team is to become the first ever Russian-owned team in Formula One
Formula One
Formula One, also known as Formula 1 or F1 and referred to officially as the FIA Formula One World Championship, is the highest class of single seater auto racing sanctioned by the Fédération Internationale de l'Automobile . The "formula" designation in the name refers to a set of rules with which...
.
Another ambitious Russian project is Ё-mobile (Yo-mobile), an innovative city car
City car
A city car is a small car intended for use primarily in an urban area.City cars are sold worldwide and most automotive industry manufacturers have one or two in their line-up. In North-America city cars are often referred to simply as "subcompacts" alongside the superminis. These kind of cars...
with a rotor engine that can burn both gasoline and natural gas and is connected to a pair of electric motor
Electric motor
An electric motor converts electrical energy into mechanical energy.Most electric motors operate through the interaction of magnetic fields and current-carrying conductors to generate force...
s. The car was introduced on 13 December 2010 in Moscow, a product of a joint venture between Yarovit, a producer of trucks based in St. Petersburg, Russia and the Onexim investment group, headed by Mikhail Prokhorov
Mikhail Prokhorov
Mikhail Dmitrievitch Prokhorov is a Russian billionaire entrepreneur and owner of the American basketball team, the New Jersey Nets. After graduating from the Moscow Finance Institute he made his name in the financial sector and went on to become one of Russia's leading industrialists in the...
, who is the leader and financier of the project. Prokhorov plans to invest around €150 million (US$200 million) in a the venture, intending the vehicle to "break the stereotype saying Russia can't produce good cars."
The Ё-mobile will be sold in three different body types—a sedan or coupe
Coupé
A coupé or coupe is a closed car body style , the precise definition of which varies from manufacturer to manufacturer, and over time...
, a hatchback
Hatchback
A Hatchback is a car body style incorporating a shared passenger and cargo volume, with rearmost accessibility via a rear third or fifth door, typically a top-hinged liftgate—and features such as fold-down rear seats to enable flexibility within the shared passenger/cargo volume. As a two-box...
and a delivery truck. Most components of the vehicle will be produced in either Russia or former Soviet Union countries. The serial production will start in 2012, with an aim to sell 10,000 during the first year of production. The initial price is to be between $10,000 and $14,500, within reach of Russia's middle class. While it will be initially sold in Russia, ë-Auto plans to sell the vehicle in Europe pending compliance with European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
regulations.
Cars
AvtoVAZ
AvtoVAZ is the Russian automobile manufacturer formerly known as VAZ: Volzhsky Avtomobilny Zavod , but better known to the world under the trade name Lada. The company was established in the late 1960s in collaboration with Fiat...
, located in the city of Tolyatti
Tolyatti
Tolyatti , also known as Togliatti, is a city in Samara Oblast, Russia. It serves as the administrative center of Stavropolsky District, although it is administratively separate from it...
. 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
Kaliningrad Oblast
Kaliningrad Oblast is a federal subject of Russia situated on the Baltic coast. It has a population of The oblast forms the westernmost part of the Russian Federation, but it has no land connection to the rest of Russia. Since its creation it has been an exclave of the Russian SFSR and then the...
. Avtotor manufactures foreign models, such as BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
, Kia
Kia Motors
Kia Motors , headquartered in Seoul, is South Korea's second-largest automobile manufacturer, following the Hyundai Motor Company, with sales of over 1.4 million vehicles in 2010...
, and General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
' Cadillac
Cadillac
Cadillac is an American luxury vehicle marque owned by General Motors . Cadillac vehicles are sold in over 50 countries and territories, but mostly in North America. Cadillac is currently the second oldest American automobile manufacturer behind fellow GM marque Buick and is among the oldest...
and Chevrolet
Chevrolet
Chevrolet , also known as Chevy , is a brand of vehicle produced by General Motors Company . Founded by Louis Chevrolet and ousted GM founder William C. Durant on November 3, 1911, General Motors acquired Chevrolet in 1918...
vehicles. In 2009, Avtotor produced 60,000 cars and accounted for 10% of Russian car production.
Avtoframos
Avtoframos
Avtoframos is a Russian automotive company, a joint venture with Renault and the government of Moscow, headquartered in Moscow...
, the third largest car manufacturer, produced 49,500 cars in 2009. Its plant is located in the south-east part of the city of Moscow. Avtoframos is a joint venture between France's Renault
Renault
Renault S.A. is a French automaker producing cars, vans, and in the past, autorail vehicles, trucks, tractors, vans and also buses/coaches. Its alliance with Nissan makes it the world's third largest automaker...
and the Moscow city administration, but is majority owned by Renault. The company manufactures Renault Logan and Renault Sandero models. The ratio of Russian-made parts is 54%. The figure is expected to rise to 74% by 2012.
The fourth and fifth largest carmakers in Russia are Volkswagen
Volkswagen
Volkswagen is a German automobile manufacturer and is the original and biggest-selling marque of the Volkswagen Group, which now also owns the Audi, Bentley, Bugatti, Lamborghini, SEAT, and Škoda marques and the truck manufacturer Scania.Volkswagen means "people's car" in German, where it is...
and Ford, respectively. In total, the five largest companies of the industry account for 80% of all cars made in Russia.
Heavy vehicles
Kamaz
KAMAZ is a Russian truck manufacturer located in Naberezhnye Chelny, Tatarstan, Russian Federation. KAMAZ opened their doors in 1976...
. 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.
Another very important company is GAZ
GAZ
GAZ or Gorkovsky Avtomobilny Zavod , translated as Gorky Automobile Plant , started in 1932 as NAZ, a cooperation between Ford and the Soviet Union. It is one of the largest companies in the Russian automotive industry....
, which makes vans, trucks and busses, among other products. Its most popular product is the GAZelle
GAZelle
The GAZelle is a series of mid-sized trucks, vans and buses made by Russian car manufacturer GAZ. GAZelles are similar to the later launched GAZ-2215/GAZ-2752 Sobol and GAZ-3310 Valdai line of vans and light trucks...
van, which has a market share of 49% in the light commercial vehicle market. In 2009, the company launched an improved version, called GAZelle Business. In the bus sector, GAZ occupied a market share of 77%. It sold 6,169 buses in the small-class, 1,806 in the medium class and 1,156 in the large class.
Russia's largest tractor maker, and one of the largest machine building companies in the world, is Concern Tractor Plants
Concern Tractor Plants
Concern "Tractor Plants" ' is a leading Russian machine building company, the country's largest tractor manufacturer and one of the largest heavy mechanical engineering companies in the world.-Overview:...
, located in Cheboksary
Cheboksary
-Twin towns/sister cities:Cheboksary is twinned with: Eger in Hungary Antalya in Turkey Santa Clara in CubaAlso Partnerships are shown with: Rundu in Namibia -External links:****...
. The company employs around 45,000 people.
Economic and political significance
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: firstly, due to the large number of employed people and secondly, because many citizens depend on the social services provided by automotive companies. For example, the well-being of the giant AvtoVAZAvtoVAZ
AvtoVAZ is the Russian automobile manufacturer formerly known as VAZ: Volzhsky Avtomobilny Zavod , but better known to the world under the trade name Lada. The company was established in the late 1960s in collaboration with Fiat...
factory in Tolyatti
Tolyatti
Tolyatti , also known as Togliatti, is a city in Samara Oblast, Russia. It serves as the administrative center of Stavropolsky District, although it is administratively separate from it...
is massively important to the city. Tolyatti is a typical monotown
Monotown
A monotown is a town whose economy is dominated by a single industry or company. The term is especially often used in Russia, where the Soviet planned economy created several monotowns in supposedly rational locations, often in geographically inhospitable areas...
, a city whose economy is dependent on a single company. The factory employs around 100,000 people of the city's population of 700,000.
In 2009, President Dmitry Medvedev
Dmitry Medvedev
Dmitry Anatolyevich Medvedev is the third President of the Russian Federation.Born to a family of academics, Medvedev graduated from the Law Department of Leningrad State University in 1987. He defended his dissertation in 1990 and worked as a docent at his alma mater, now renamed to Saint...
launched the Medvedev modernisation programme
Medvedev modernisation programme
The Medvedev modernisation programme is an initiative launched by President of Russia Dmitry Medvedev in 2009, which aims at modernising Russia's economy and society, decreasing the country's dependency on oil and gas revenues and creating a diversified economy based on high technology and innovation...
, which aims to diversify Russia's raw materials and energy-dominated economy, turning it into a modern high-tech economy based on innovation. Following this, Russia's automotive industry has been in the spotlight due to its great potential for modernisation.
Former President and current Prime Minister 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
Lada Kalina
The Lada Kalina is a supermini produced by the Russian automaker AvtoVAZ and sold under the Lada brand. It began production in November 2004 as the 2004 year model in Russia, Ukraine, Kazakhstan and Belarus, although dealership availability for foreign markets started only in September 2005.The...
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.