Russia: GM and Ford take opposite routes image

With the country’s economic crisis seeing as persistent throughout at least this year, the first and second US automaker have different strategies on weathering the effects.

Ford and GM are known for their troubled European operations, both accounting Russia as a big part of the regional demand. But now all auto companies are suffering the deep collapse of the country’s economy and auto market. But, somehow, Ford’s plans look as total opposites of GM’s decision to drop out of Russia and abandon dealers, suppliers and employees in the country as the automaker is exiting almost entirely from the market. The US rival has chosen to deepen its links to the country, dealing with the short-term losses in a bid that emerging from the crisis will allow the company to capitalize on the market void of increased competition. “Our position hasn’t changed. We believe Russia has significant potential in the longer term,” comments a Ford representative.

Ford has opted to adopt a three-way strategy to gain the necessary advantages. First off, risks are smaller by tying in a deeper joint-venture with Russian local partner Sollers. Next up, the US carmaker is shedding the reliance on expensive imports by adding production capacity to the Russian factories (a big failure for GM). And lastly, its products are increasingly better suited to address local market demands than GM’s. Ford Sollers is en route towards introducing four new models in Russia in 2015, including the Fiesta and is getting ready to open an engine production facility in Tatarstan to compliment its existing three auto factories.

Via Automotive News Europe