Total Investments in Auto Parts Production in Russia Is Expected to Reach &eu4.4bn by 2020

Total investments in auto parts production in Russia is expected to reach €4.4bn by 2020, according to a recent forecast from the Russian Ministry of Industry and Trade. According to Alex Rakhmanov, deputy head of the Ministry, up to 150 auto production plants are expected to be established in Russia in the coming years, most of which will be built on foreign investments. According to Rakhmanov, the average payback period of these projects is expected to be in the range of 4-7 years, whereas the volume of investments will range from €8-80m. In 2011 the Russian market of auto parts reached €33bn in value terms. In the short term, the market is expected to grow by 20-30% per year, mainly due to an increase of local auto production and local autofleet. So far, the majority of auto parts have been supplied to Russia from abroad but in recent years the share of locally made auto parts has significantly increased. However, local auto parts producers (total number is currently estimated at 2000) are still unable to compete with foreigners so mainly specialize in the production of low-tech products and parts. Experts estimate that Russia's technological level in auto parts’ production lags behind their foreign counterparts by 30-40 years. The quality of Russian products remains low. In Europe, the average number of claims is about 0.002 per 1,000 cars, while in Russia this figure is estimated at 0.6. Source:europeanplasticsnews