Knorr-Bremse‘s Russia division estimates the current crisis in the automotive sector will end sooner than some of the more pessimistic predictions, as the country starts to benefit from a slowly rising oil price.
?Russia has endured significantly falling auto sales for more than a year now, with the spill-over from the country’s economic woes also translating into many commercial vehicles being idled, but a gradually strengthening oil price is providing some grounds for optimism.
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“The comeback could be as quick as before,” Knorr-Bremse Russia managing director, Eduard Aniskin, told just-auto on the sidelines of the recent Russian Automotive Forum (RAF) organised by Adam Smith Conferences in Moscow. “A lot in this country depends on the oil price.
“Our budget is US$50 [a barrel of oil], so we are not so far away from it. A lot of trucks are on the side right now, they are not being used, there are not a lot of goods being shifted around.
“There is a lot of speculative influence on the price level of oil. My personal feeling is we will come back a little sooner, not five years but two or three years.”
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The Knorr-Bremse Russia chief noted the significant involvement of Moscow in supporting the domestic automotive sector, pumping in RUB50bn (US$726m) in 2016 alone after last year’s RUB43bn injection, to subsidise car interest rates and reduce the age of the country’s vehicle parc.
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By GlobalData“The government is doing quite a lot of things to incentivise local production and giving savings on various levels of tax,” added Aniskin. Now it is the third year they support the subsidy of interest rates of car purchases and credits.
“It [auto sector] does matter for the government. It is big manufacturers and they also have substantial industries around them.
“Knorr-Bremse – [we] are optimising ourselves – we are looking at new customers and diversifying.”
In common with other Russian producers, last year, Knorr-Bremse introduced a four-day week, but in the brake manufacturer’s case, this only lasted for three months.
AvtoVAZ also recently announced it was to shift to a four-day week, although Russian law means this can only be for a maximum of six months.
“This [four-day week] is one of the crisis measures to help us preserve core personnel of the factory,” an AvtoVAZ spokesman told just-auto from Russia. “That will [result in] pay cuts, that is logical and it will include top management. It is a 20% cut.
“Under Russian legislation, if a company is using a four-day week or a cut in work, this regime can be used for half a year.”
