Daimler considers plant construction in Russia

Article by Andrew Christian, on April 10, 2015

Daimler plans to build a car plant in Russia and will choose from three potential sites -- Saint Petersburg, Tatarstan's capital Kazan, or the central Russian region of Sverdlovsk, according to Russia Today. It’s expected that Daimler will make its decision next month. Brand sales in this country are rising despite the steep downturn in its market.

According to Yuri Spiridonov, the president of the Russian investment agency Invest in Russia, Daimler wants to begin construction of this plant at the end of 2015 and hopes to achieve full capacity by 2017. The report also revealed that Daimler will produce the S class, E class, GL, ML and A class at this plant.

Officially, Daimler has said that it has made no decisions yet on the issue of the local production of Mercedes-Benz passenger cars in Russia. A company spokeswoman told Automotive News Europe that the company is “continuously reviewing local production” and is looking at the growth in the market and sales prospects.

The Russia Today report divulged that in order to start production quickly, Daimler may use the terms of an existing agreement signed with another automaker like General Motors. Notably, GM is terminating the sales of Opel and mainstream Chevrolet cars in Russia due to very poor sales. It is also idling its St. Petersburg plant.

However, Daimler has revealed that it has no interest in inking a deal on industrial assembly at GM sites in Russia. Russia’s economy has suffered from declining oil prices, a weak currency, and Western sanctions over Ukraine. Many consumers have been putting off purchases of expensive items like cars.

The Moscow-based Association of Businesses in Russia said that even when new-car sales in Russia have fallen by 36% in the first quarter, Mercedes-Benz sold 12,838 vehicles (a 7.3% increase). In the same period, BMW sales dropped by 14% to 8,334 units while Audi’s sales fell by 26% to 6,132 units.

Topics: daimler, russia

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