Toyota will invest 135 million euros to build the RAV4 in Russia in 2016

Article by Christian Andrei, on September 19, 2013

The RAV4 has become Toyota's top-selling model in Russia and so it comes as no surprise that the automaker will invest around 18 billion yen (135 million euros) to expand capacity at its St. Petersburg factory where the assembly of its RAV4 compact SUV will start in 2016. Even as the economic slowdown has caused auto sales to fall for the past six straight months in Russia, RAV4 sales have increased by 43% to 27,000 vehicles in the eight months to August.

In a statement, Toyota said that the expanded plant will roll out up to 50,000 RAV4 vehicles a year based on the complete knock-down system. Currently, this plant (which makes the Camry sedan) is capable of producing 50,000 vehicles a year.

Toyota spokesman Ryo Sakai said that demand is increasing for the RAV4 and with its impressive sales, it makes sense that the automaker start local production of this model based on a longer term standpoint. He said that Russia offers incentives to urge foreign carmakers to localize production. In Russia, the RAV4 takes the No. 4 spot when it comes to SUV sales.

It follows Dacia's Duster, the Chevrolet Niva and the Lada 4x4. The RAV4 makes up almost a quarter of Toyota's sales in Russia. Toyota’s car sales in Russia fell 3% year-on-year this year, compared to a 7% drop in overall car sales in the country. In recent years, sales have increased. Last year, Toyota posted sales of 169,000 vehicles in Russia, a 26% increase compared to 2011 sales. Meanwhile, Russia's total auto demand increased by 11% to 2.94 million vehicles.

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