GM and Ford want 60% of the parts used for the Russia-manufactured vehicles to be produced in the region.
Ford predicts that by 2014 Russia will be the biggest auto market in Europe, but there is still a lot of work to do to get there. Currently automakers import parts for the Russia-manufactured vehicles, which means a loss of time due to bureaucratic delays. James Bovenzi, head of General Motors Russia, expects sales in the region to remain flat or fall 1% or 2% this year.
When GM opened its plant in St. Petersburg in 2010, it also built a 270,000-square-foot warehouse to stockpile parts, as it took up to 25 days for the parts to get to the facility. Today it taxes up to 15 days. Currently 20% of the parts are manufactured locally, and the automaker wants to raise production to 60% by 2018.
Ford has three plants in Russia which produce 120,000 units annually, but the company plans to increase capacity to 300,000 units and also open engine and stamping plants in the Tarkastan region. Currently, 20% of Ford’s parts are sourced in Russia and the company wants to reach 60% by 2015.