Russia’s energy-dependent economy is taking a hard hit. The ruble lost half of its value this year and many companies (automakers included) have suspended part of their activity in the country; Renault-Nissan is no longer taking orders, and its CEO, Carlos Ghosn, says we should prepare for worse, although hope is not all lost.
He says they’re only suspending orders on certain models, though, but things are not looking up at the moment. In order to compensate for the unstable currency, Nissan has had to increase the price of the cars it still sells by 5 – 8 percent, especially those built locally using a big number of imported parts.
Ghosn added that “the bad news is that the market is shrinking. This is bad news for everyone. When the ruble sinks it’s a bloodbath for everybody. It’s red ink, people are losing money, all car manufacturers are losing money.”
The Renault-Nissan group operates several factories in Russia, some of which are under its own brand names, while others are joint-ventures with local partners. Even under these stark economic situations, they’re still optimistic, it seems, and have announced plans to double capacity at the St. Petersburgh plant which currently makes 50,000 vehicles per year.
Reuters reports that in spite of the visible economic downturn, Nissan is actually faring much better than rivals. Apparently, it’s gaining market share and they plan to triple sales within the next three years… Russia is Nissan’s fifth-largest market, so it has huge interest to keep things working at least the way they’ve been working until now.
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