Ford is optimistic that Russia’s sales growth will hold up

Article by Christian Andrei, on October 3, 2011

Despite the economy being on a rough patch, Ford Motor Co. is optimistic that Russia’s sales growth will hold up. Ford also believes that the government will support Western involvement in the industry even after the upcoming elections have passed. These statements were given by Ford’s new chief in Russia, Ted Cannis, at the launch of Ford-Sollers.

Last month, Cannis took over as the new CEO of the joint venture between Ford and Russian carmaker Sollers. He also said that the demand in Russia remains “strong.” Ford predicts that its overall Russian car sales for 2011 will be "2.6-2.7 million,” higher than the 2.45 million forecast of the Association of European Businesses (AEB).

In 2009, Russian car sales had been cut by half as the global economic crisis resulted to a drop in demand and dried up access to credit, says Autonews. However, the market experienced a sharp recovery, with 2011 growth forecasted to be at 30%. Ford-Sollers is a joint venture that will almost treble Ford's production capacity in Russia and will enable it to benefit from the state-sponsored incentives like free import tariffs on parts.

To gain from the scheme, Western carmakers such as Renault SA, Volkswagen AG and Ford have ramped up Russian production. This scheme is a part of the government's plan to reinforce its industrial base and lessen the economy's reliance on oil and gas. Ford-Sollers intends to begin production of Ford Transit vans and Ford Explorers at Sollers' factories in 2012.

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