Will oil price stability finally provide Russia with the kick-start it so needs?

Will oil price stability finally provide Russia with the kick-start it so needs?

Is there light at the end of a long, dark tunnel for Russia? After more than a year of catastrophically plummeting light vehicle sales, last month saw a real brake on the runaway falling numbers. Oil prices – on which Russia is so heavily dependent are at last showing some real depth to their rise and have now surged 50% since January. The recent Russian Automotive Forum in Moscow provided a barometer of where the industry is – and where it might go. Here are some of the quotes which resonated.

"I believe in Russia. I urge, plead with others to believe in Russia" - Visteon Avtopribor Electronics general director Alexander Kychkov. 

"One day the crisis will be over and it is important to be ready for the time when the economy will be on the rise." Lada Izhevsk CEO, Mikhail Ryabov.

"Pirelli believes this market will come back. We reconfirm Russia as a strategic country for us. We are definitely not downsizing - we are doing everything to keep the factories running." Pirelli Tyre Russia general director, Aimone di Savoia Aosta.

"This is something really missing in Russian industry - to be able to export. As we see it there is a cost advantage – there must be cost advantages in the value chain." VW Group Rus procurement director, Patrick Husemann.

"The support plan was the very first plan signed by [Prime Minister] Dmitry Medvedev." Russian Deputy Minister, Ministry of Industry and Trade, Alexander Morozov.

"What is in store for us this year? We see consumption will go down and the behaviour of the customer will be the same. People will continue to save money because they don't understand what is going on." Autostat analytical agency director, Sergey Tselikov.

"The forecast for 2015 was even more pessimistic than we actually got." Deputy Minister, Ministry of Industry and Trade, Alexander Morozov.

"We see crisis everywhere in Russia. Some years ago there were big dreams. I [remember] the headlines where Russia was supposed to be the biggest car market in Europe, overtaking Germany." Volkswagen Group Rus procurement director, Patrick Husemann.

"We can't simply look to the Russian government to solve the ills." Ford Sollers VP purchasing, Rob Harrison.

"We think to go to 70% localisation is quite a challenging thing to achieve." PCMA Rus head of purchasing department, Alexander Smolyankin.

"Pirelli is here to stay and we are not even remotely thinking of reducing our investments in Russia." Pirelli Tyre Russia general director, Aimone di Savoia Aosta.

"In spite of the challenging market situation, our cars are becoming more safe and more clean." Deputy Minister, Ministry of Industry and Trade, Alexander Morozov.

"Why should I buy a new car? Times are tough. It is better to be safe than sorry, a good Russian proverb. Term of ownership is growing – people have money but are not willing to part with it." Autostat analytical agency director, Sergey Tselikov.

"Just line everyone up and start bossing them – we can do it but it won't be efficient." Deputy Minister, Ministry of Industry and Trade, Alexander Morozov.

"The image 'Made in Russia' – globally it does not exist." IHS Global European LVS Forecasts manager CEE, Tatiana Hristova.

"We see almost the complete absence of FTAs outside the immediate neighbourhood." Volkswagen Group Rus head of business development, Vassil Stavrev.

"Naturally we will have to trim this strategy [at some point] – that is what the President said and by Q3 I hope we will have developed the new strategy [for the] macro-economic development of the industry." Deputy Minister, Ministry of Industry and Trade, Alexander Morozov.

"Eight years ago, my division was only integrated in GAZ Group and I had orders only [for] car assembly. Now I will have orders not only [for] car assembly – [but also] for example train manufacturer, RZD." GAZ Group Autocomponents director, Kiril Epshteyn.

"The comeback could be as quick as before. A lot in this country depends on the oil price." Knorr-Bremse Russia managing director, Eduard Aniskin.

"Maybe it is a good time to open a new business in Russia. We need political stability, that is the main factor for anyone who would want to stay." Boryszew Plastic Rus chief financial officer, Bogdan Marciniak.

"Marsilli is in Russia to provide local support for electro-mechanical component producers in case of localisation." Representative office Russia director, Eugene Bannikov.

"It [sanctions deal] has to hold – there is no other chance." Frost & Sullivan regional head, Automotive & Transportation, Middle East and North Africa, Subhash Joshi.

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