Daimler eyes new car plant in Russia

15th June 2016, Comments 0 comments

German automaker Daimler, which owns the Mercedes-Benz and Smart brands, said Wednesday it was in talks with Russian authorities on possibly opening a production site there.

"We're in talks with the Russian authorities to ascertain whether the economic conditions are in place for a local car manufacturing site," a company spokeswoman told AFP in an email.

But no decision has yet been taken, the spokeswoman insisted and declined to reveal any financial details.

German business daily Handelsblatt reported Wednesday that the talks were about a 200-million-euro ($224-million) investment to build a factory near Moscow that would assemble up to 30,000 Mercedes-Benz cars each year.

Unlike its rival BMW, Daimler currently does not operate any production site in Russia.

Building one would enable the group to reduce its import costs and deliver cars to major Russian clients, the newspaper said.

Until 2012, the Russian car market had been the biggest in Europe after Germany.

Since then, car sales there have plunged by around 45 percent due to a sharp economic downturn caused mainly by Western sanctions in the wake of the Ukraine crisis and a drop in oil prices.

For 2016, carmakers are forecasting a further decline of around five percent in their sales in Russia.

The situation has caused some carmakers, notably US giant General Motors, to reduce their presence in Russia.


© 2016 AFP

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