Russian automakers may get state help to purchase foreign assets under a development strategy for the industry being considered by the government this week.
According to the Russian business daily Vedomosti, the Industry and Trade Ministry has proposed the measures, which could see Russian companies in the sector acquire access to new technologies by buying overseas companies.
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The Industry and Trade Ministry is concerned by the poor state of the domestic auto sector and has pointed to the fact that Russian auto companies are operating with old and out of date equipment and technologies.
The proposals suggest that projects could be funded by state-owned groups such as Vnesheconombank (VEB). The ministry has estimated that the car industry requires an investment of RUB627.3bn by 2020 to help it recover. Of the total, RUB225.4bn should be invested in 2011-2012, the daily said.
Yesterday (1 March), Renault CEO Carlos Ghosn said that the Russian car market has already overcome the lowest point of decline and is now expected to start growing. New car sales were about 1.4m units in 2009, Ghosn said, adding that the market was now expected to start recovering at a faster pace.
Russian vehicle production soared 91.9% year on year to 44,257 units in January according to industry monitor ASM Holding. The jump was attributed to a significant increase in the country’s car output, which more than doubled to 41,806 units from 18,177 units in January 2009.
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By GlobalDataRussia’s vehicle output in 2009 fell 59.7% to 722,102 units.
