Industrial Cooperation in the Russian Car Industry

The automotive industry ranks alongside export-oriented industries as one of the most promising targets for investment in Russia. On the demand side, its future prospects depend on growth of internal demand fuelled by improvement of Russian living standards and also on the capacity of Russian car manufacturers to regain and expand market shares on their traditional markets in the former Soviet Union, India, Latin America and the Middle East. At the same time, Russian car producers have to cope with a new competitive environment brought about by the presence of foreign car producers in the country. On the supply side, production of cars is supported, among other things, by fairly high levels of development in the Russian metallurgy and petrochemical industries. The car industry has outdated equipment and produces obsolete models, but overall its production base is quite strong, although in urgent need of restructuring.