Renault Russia says it is aiming to increase its level of component exports building on substantial gains already in the last couple of years.
That confidence takes account of a relatively stabilising Russian economy, which while still hobbled by the drastic effect of international economic sanctions, particularly with access to finance, has witnessed its ruble and oil price firm up, albeit with some considerable distance to recover previous losses.
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After four disastrous years during which the automotive market felt the chill winds of Russia’s overseas policies – particularly with regard to Crimea and Eastern Ukraine incurring the wrath of the West – the Association of European Businesses (AEB) recorded the first modest uptick in quarterly sales recently leading to modest hopes of a recovery.
Renault Russia is looking to take advantage of that situation, but also from a still-competitive ruble exchange rate which makes its parts competitive abroad.
“We are looking to export components,” Renault Russia general director, Andrey Pankov told just-auto on the sidelines of this week’s St Petersburg International Economic Forum (SPIEF) in Russia’s northern city.
“In 2016 we exported components [worth] around EUR27m which is 70% growth compared to 2015 when we started. It is just a beginning of new business we supply to other countries. All components we are using here in Russia [are] for manufacture of Renault cars – [they are] absolutely in compliance with international standards.
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By GlobalData“It is more about tomorrow because we just started this business a couple of years ago – it is a good opportunity. We are using this opportunity with support from the Russian government.”
Renault’s Russian chief noted that at 60%-65% localisation, the rate was sufficient to make sending its business overseas competitive, a common theme at this week’s SPIEF which saw 6,000 delegates including CEOs, Prime Ministers and Heads of State, descend on an uncharacteristically chilly St Petersburg in June.
The thorny issue of how to establish a ‘Made in Russia’ concept as a benchmark of quality was also tackled by Renault as it looks to provide its expertise in sending its products overseas.
“‘Made in Russia’ means not only improving the reputation of the country, but also as an exporter,” added Pankov. “When we started export [of] passenger cars we paid with [general] 75% of import duty – that is how countries protect their markets. Now we pay 50% and I think it will drop stage by stage.
“We will be exporting automobiles not only to Vietnam, but other Asian countries [as well]. We are confident in the coming years we may have sustainable State support taking off barriers to other markets.
“We are [for example] discussing now Iran, where duty is around 20%; it may go down to 4%.”
