Russia’s slow market forces Ford to increase exports image

Ford’s branch in Russia is looking for ways to keep its volumes at acceptable levels, as the crisis of the country’s auto market is seriously affecting their sales.

The recession of the Russian economy is putting high pressure on the automakers to find ways to cope with the downfall of the auto market. The demand for cars kept dropping for the last three months at a faster rate than initially expected. For example, the sales dropped by 38,5 percent in October compared to the same period of last year, after a 29 percent decline in September. In the first ten months, 1.32 million cars were sold, a 34 percent decrease. Ford Russian unit is taking into consideration expanding exports as the forecasts are predicting the slow trend to continue for another year at least, its chief executive told Reuters. “Export is something we’re looking at,” said Mark Ovenden, president and CEO of Ford Sollers, Ford’s joint venture with Russian partners. “I’d like to look at it beyond a few thousand (vehicles) … and see whether there is a more strategic export opportunity for us.”

Ford Sollers already exports into former Soviet countries such as Kazakhstan, in small volumes, but Ovenden said the company could also target markets in Eastern Europe and beyond. Ford also has a plant in Romania in which the B-Max is built, but the output is not comparable with the volumes made in Russia, where it makes the Fiesta, Focus, EcoSport and Transit, among others. Ford sold around 30,500 cars in Russia in the first 10 months of the year, roughly 40 percent less than in the same period a year earlier, according to data from the Association of European Businesses lobby group, but its production capacity is for 350,000 cars a year. “The challenge everyone will face is that when domestic demand is volatile, how do you continue to fill the capacity?” he said in an interview at Ford’s offices on the outskirts of Moscow. “That’s where I think you need to develop the export capability.”

Via Reuters