Sanctions on Russia from the European Union and the United States don’t seem to have an effect on German carmakers’ plans to increase their activities in Russia. Daimler AG is reportedly considering building Mercedes-Benz cars in Russia as part of a plan to widen its global production capacity and assemble more vehicles near their destination markets.
“We have been looking at the basic parameters and potential of local production of passenger cars in Russia, and have held various discussions. These activities will be continued,” Daimler spokesman Sebastian Wahle told Bloomberg.
Wahle added that Daimler is seeking to expand production to meet 2020 growth targets, but didn’t say when a decision will be taken. On Tuesday, Russian newspaper Vedomosti reported Mercedes’s interest for a production facility in the country.
Daimler boss Dieter Zetsche has made no secret of his desire to regain the top spot in global luxury sales after losing it to BMW in 2005 and ceding second place to Audi in 2011. Last week Mercedes-Benz announced plans to spend €1 billion ($1.38 billion) to more than double production at a Beijing plant.
The Russian car market has been on decline for the past year, with deliveries shrinking 4 percent in January and February 2014, following a 5.5 percent drop in 2013 to 2.78 million vehicles.
However, the market remains attractive because the country has far fewer cars per capita compared to Germany, Europe’s largest car market. Russia has a population of 143.5 million, while Germany, where 2.95 million cars were sold last year, has 81.9 million.
By Dan Mihalascu
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