Ford and GM Invest Heavily in Russia image

Ford and GM invest heavily in Russia to benefit of growth and increased demand for SUVs.

“It’s one of the few markets in Europe that is still growing,” said Carol Thomas, a U.K.-based analyst for market researcher LMC Automotive. “And if you add in former Soviet markets, it’s pretty significant.”

Analysts predict that the passenger auto market in Russia will increase by another 1 million units annually and surpass 3.5 million units and in the next decade, due to the small vehicle import tariff and aging vehicle fleet, new vehicle sales in the country will equal the number of the vehicles on the roads today.

As Russia is the second largest market in Europe, and is expected to surpass Germany by the end of this year or in 2014, US automakers begin to invest heavily in the region. Ford has already completed building a facility here and it plans to triple capacity in the region to almost 350,000 units in the following years. GM is investing $1 billion in Russia to increase annual production from 100,000 to 230,000 units.

“We see Russia as one of our key growth areas,” said Bruce Hettle, Ford’s executive director of global manufacturing and engineering in a telephone interview. “We’re feeling higher than we ever have,” following the opening of Ford’s newest plant in Tatarstan, Russia.

Source: The Detroit News