BMW will build the X4 SUV in Russia with local partner Avtotor starting this summer.
The BMW X4 will be built at Avtotor’s Kaliningrad plant using assembly kits shipped from the German automaker’s US plant in Spartanburg, a BMW spokesman told Automotive News Europe. The X4 will be the seventh BMW model built at the Avtotor facility from semi-knockdown kits.
The announcement comes less than a month after BMW said it had postponed a decision on building its own plant in Russia because of the unstable local market.
New-car sales in Russia fell 38 percent through April because of customers’ reluctance to make large purchases in an economy hit by Western sanctions, a falling currency and low oil prices.
BMW sales fell 20 percent in the same period, according to data from the Association of European Businesses in Russia. However, premium brands are selling better than volume marques as wealthy Russians invest in hard goods during the economic crisis.
That is why BMW and Mercedes-Benz are interested in local production, which would also allow them to bypass Russia’s “recycling fee” imposed on all imported vehicles.
The Avtotor plant in Kaliningrad builds the 3-, 5- and 7-series sedans for BMW, as well as the X1, X3, X5 and X6 SUVs. Avtotor also produces vehicles for Opel, Chevrolet and Kia.
Last year Avtotor built 25,000 vehicles for BMW but the forecast for 2015 is 21,000 units. According to IHS Automotive, premium brands with local production will be the first to profit from a market rebound.
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