Honda will produce cars in Russia image

Honda plans to begin making cars in Russia, The Nikkei has learned. Japan’s No.3 automaker plans to set up its first assembly plant in Russia where it will build 30,000 to 50,000 cars annually.

Russia has an expanding car market and the Nikkei newspaper said Honda, the third largest Japanese vehicle manufacturer, has submitted the plant plan to the Russian government.
Honda is consulting officials on the location of the assembly plant, which will use components imported from its global facilities, and the Russian Far East is seen as one candidate, the Nikkei said.

Russian Car Market
Russian annual car sales are expected to return to pre-crisis levels of 2.9 million units during 2012 thanks to the ongoing government scrappage scheme.

According to the Association of European Businesses, Russian drivers are expected to buy around 2.24 million cars in 2011 — 17 percent more than last year — after a 30 percent gain to 1.91 million in 2010.

Stanley Root, Automotive Industry Leader, PWC, says the outlook for domestic vehicle sales is likely to bring more parts manufacturers to Russia.

“We’re expecting sales to improve strongly over the next 5-10 years; of those sales we’re expecting the percentage produced in Russia to increase, so there’s a multiplier there, and then the number of components, locally produced in that production is going to increase significantly with the new decree and focus on localization.”

August Sales
Last month, Russian car sales rose 32 percent year-on-year after increasing by 27 percent in July, the Association of European Businesses said.

David Thomas, Chairman of the AEB Automobile Manufacturers Committee commented:

“The 32% growth in August compared to last year is in line with the AMC expectations for the remainder of 2011. With improving consumer confidence and availability of credit we forecast that the full year growth will be around 30%, which will be a similar growth level to 2010. This more stable growth pattern is encouraging and shows signs that the Russian automotive market is following a more stable progression back to pre-crisis levels.”

From January, Honda sold 12707 cars, 1526 just in August 38 percent more compared to last year.