By Andrey Ostroukh
MOSCOW--Russian authorities saw no signs that foreign automakers
will shut their businesses in the country as General Motors Co. did
this week, Trade and Industry Minister said Thursday.
Russia's cas sales plunged this year as the ruble lost almost
50% of its value against the dollar over the past year. Foreign car
makers, who once saw Russia as one of the most promising emerging
markets, are now facing poor demand and some are suspending their
local production or cutting jobs.
Speaking to reporters on the sidelines of an economic forum in
Moscow, Denis Manturov said his ministry sees no signs that foreign
companies will leave Russia following General Motors.
GM said on Wednesday it was closing its plant in Russia and
stopping sales of many of its products in that market. The move
came in response to regulatory pressure, economic uncertainty and a
dire outlook for Russian auto sales. Industry sales volume in the
country fell 10% in 2014.
Mr. Manturov said GM's decision to leave Russia had no political
motivation and was caused by the company's strategic mistake --
GM's localization was low, as only 25% of car parts were produced
locally.
While many major auto companies have built factories in Russia,
they rely on imports for many components, which have become
dramatically more expensive with the ruble's depreciation.
"Naturally, given today's ruble rate, it's impossible to compete
with South Korean companies that raised their level of localization
to 50%," Mr. Manturov said.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com
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