Blog: Russia moves into gear
Dave Leggett | 31 August 2006
It wasn't all that long ago that several vehicle makers were holding off from investing in Russia - unsure about the level of investment risk. Those days seem to be behind us now (although I would just caution that the current economic boom is heavily tied to high energy prices). Automakers are apparently jumping in with gay abandon, not wanting to be left out or last to the party.
We've published a good overview piece from Tony Lewis who has been at the Moscow Show this week (below link).
There are still some questions to ponder though. Domestic makers will be under increasing pressure. What is to become of local behemoth AvtoVaz? Sounds like relations with GM have got better lately - the joint venture performing better and expanding production.
Could GM be tempted to get closer to AvtoVaz now? It may have looked like a potential trap and money sink a few years ago, but the shift in the Russian market could have transformed it into a significant opportunity (ready-made distribution and aftersales network for starters; why not lever GM industrial strength to update and improve AvtoVaz offerings, getting GM content into AvtoVaz products also; maybe take AvtoVaz for a good drink at the Chevrolet/Daewoo water trough).
Other carmakers sniffing around AvtoVaz (eg Renault) is also something for GM to think about.
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