Russia- Attractive markets for brand new cars
Russia is located to the northeast of Europe and north of Asia. Russia along with other 13 countries was a part of the Soviet Union for decades. After the dissolution of the Soviet Union in 1991, Russia still is one of the largest countries of the world in terms of area. Russia was under the rule of President Vladimir Putin for more than a decade. President Vladimir Putin had re-nationalized private sectors and forced the expansion of regional influence. This had differentiated Russia from the rest of the world.
Russia has the largest natural gas reserves in the world. It also ranks second in the world for its coal reserves and eighth for its oil reserves. This makes Russia as a nation abundant of natural resources. Having the largest natural gas reserves has made Russia the largest exporter of natural gas. Russia is also one of the largest exporter of oil, timber, metals and defense equipment. Russia has strong trade relations with European Union. This relationship has increased the growth of bilateral trade and investments. Major of the investments in Russia come from the member states of the European Union. Due to increase in the economic growth of Russia, there has been a rapid increase in the growth of living standards. Russia also is the largest producer of arms, high-tech military equipment and fighter jet.
The automotive industry in Russia is among the fastest growing markets in the world. Russia is attracted by European investors and it will remain as one of the most attractive markets. There are units of many international car manufactures in Russia. These units majorly produce light motor vehicles and heavy motor vehicles. The reason why this industry has been attracted by major manufactures is due to raise of import duties on cars and reduction of tariffs on spare parts.
However experts say that, this industry has been on a decline for a while now due to global financial crisis. There has been a decline in automobile sales for a few months now. The government is taking measures to overcome the decline. It has also been projected that there will be future decline in the sale of automobiles. This will affect the growth of this industry and will also affect the local production units. The forecast of sale of automobiles in Russia will be lesser compared to the previous years. The market will grow but the growth will be slow and steady. This downfall will be due to lack of economic diversification, slower economic growth and structural causes. In spite of the estimated downfall, experts say that Russia will remain one of the most attractive markets with enough potential. However, automotive export from Russia will play a minor role in the coming years.