Volkswagen Group Russia estimates the domestic market could reach 3.1m units by 2018, but is urging a reduction of red tape in the country.

Volkswagen’s expansion plans were boosted by the successful start this year of full production in Nizhny Novgorod of its Yeti, Jetta and Skoda Octavia models, although overall it saw a 4.5% drop in 2013.

“Is it true the Russian market will grow to 3m in 2018 – I think yes – I still believe in the 3.1m market by 2018,” said Volkswagen Group Rus general director, Marcus Osegowitsch, at last week’s Russian Automotive Forum organised by Adam Smith Conferences in Moscow.

“In the long run, it will deal up [a] roller coaster, [which] will have both deep valleys and peaks. Everyone expects price increases and they will come, no doubt.

“Of course the job for all of us is to do further, deep localisation. Market stimulation is absolutely necessary. There are so many things we have to do in Russia, which are a waste of time and for what benefit?”

Osegowitsch also called for more T1 and T2 suppliers to enter the market, while also urging “supplier stability and competitive and stable pricing,” as well as base metal provision.

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“There is a whole bunch of materials still missing in Russia,” he said. “Raw materials – steel we get a bit from Severstal but it is way not enough. Rubber, plastics, fabrics…engines, axles, it is missing. It is not available in this country.”

The current stand-off between Moscow and the West concerning Russia’s annexation of the Crimea region has created a considerable political stir, but Osegowitsch believes this will be of a short-lived nature.

“The East-West tensions we are currently having are not really helping, but I think this is a temporary thing and it will go away,” he said.

The Volkswagen Group Rus general director warmed to his theme of reducing red tape, noting: “So many things where government and State get involved.

“Why do we need all those? In the [current] special economic times, we should get rid of that.

“We have not understood why the Russian government needs that. To make [it] even more difficult with a million pieces of paper and a million stamps – I think that should be history.”