Russian Factory Pushed By Mercedes-Benz Despite Sluggish Sales
Peter Parcon January 19, 2016
Even as the local Russian market has taken a nose-dive Mercedes-Benz is still intent in establishing a new plant in the country, as shown on a report from worldcarfans.com.
Dieter Zetsche, CEO of Daimler, said the factory in Russia is needed by the company to complement is notable sales performance. The revelation was made to Automotive News Europe recently in Detroit. He added the company is pursuing the new factory since the brand is the best-selling premium marquee as it copped 2.67 percent overall market share.
Russian car sales have gone down by 35 percent through November last year compared to the same period in the previous year. Deliveries of Mercedes-Benz from January to November 2015 have also gone down by 14 percent. Despite this, Daimler still thinks it is still necessary for the company to put up a factory in Russia. However, it is important to take into account that a Moscow-based lobby group provided the sales figures and it did not come from Mercedes-Benz.
Sverdlovsk or St. Petersburg, Kazan are the two locations where Daimler is thinking about establishing the factory. However, establishing a partnership with a local manufacturer may be better for Daimler instead of establishing its own factory, industry analysts said. BMW already has an existing agreement with Avtotor, which manufactures a number of BMW models in its Kaliningrad facility. Car sales in Russia are expected to go down by another 14 percent at the end of the year, which makes it more practical for Daimler to sign an agreement with a local manufacturer to build assemble its units in the country.
