PSA Peugeot Citroen and Mitsubishi’s joint venture in Kaluga, PCMA ‘strongly insists’ its management must be ‘Russified’ as it looks to promote local talent to top positions in the country.
Using the domestic population as well as indigenous partners was a key theme at this week’s Russian Automotive Forum (RAF), whose conference is set against the backdrop of soaring inflation and interest rates, as well as rock-bottom consumer confidence.
“The message we send to the Russian managers is we create a tremendous opportunity for them,” PCMA Rus general manager, Jean-Christophe Marchal, told just-auto on the sidelines yesterday (17 March) of the RAF in Moscow.
“It is absolutely vital for us regarding the Russification of management. I strongly insist now it is time for Russian managers we have, to manage the plant with a very small number of ex-expatriates and it is part of the cost-reduction plan.
“We work on reducing the number of ex-expatriates because now, I am sure it is time for a Russian manager to run the factory.”
Marchal also issued a robust plea for more Russian suppliers to come forward to work with PCMA as it looks – in common with many joint ventures in the country – to offset the debilitating effects of the recent plunge in the Rouble value.
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“We are ready to welcome Russian suppliers – for us the main priority is localisation,” said the PCMA chief. “In spite of the difficulties of low volumes we have now, we have some successes.
“We have localised batteries and light alloy wheels, which were not localised at the beginning. Our target is to get to 50% localisation. Currently we have identified 185 parts which could be localised in Russia and for the time being, we have 100 for which we do not have suppliers yet.
“Increasing localistion rate is our key strategy.”
In common with many automakers in Russia, PCMA acknowledges a “tough environment” at the moment, with data released from AEB showing a huge fall in sales of passenger cars and LCVs of 38% in February alone and on the back of almost unrelenting monthly drops.
The strength of the Euro and Dollar against the Rouble also presents myriad challenges for automakers who need to import from abroad.
“Of course it means we suffer from prices of parts we have to import,” said Marchal. “Even the parts we buy in Russia, some raw materials [for them] are imported.
“There is also the fact today there is a kind of crisis expectation, which makes medium class segment customers delay their expenses buying a car.”